The independent. [volume] (Lincoln, Neb.) 1902-1907, 1904-05-12
SECRETARY OF the TREASURY

He 10 .. Offlcsr Of The United statss Gov
srnmsnt bat An Agent Of Wall street
ana Does Its Bidding
Editor Independent: The SSth abb
stract of the condition Of the national
banks, issued by the comptroller OF
the currency, and covering the time
from January 20 to March %, has been
sent out. Reviewing these reports IS
somewhat monotonous, for each shows
about the same conditions and the
same continued violations of law. A
large per centum OF the Ego reserve
city banks are short in the reserves re-
uuired by law to be held. The seven
st. Louis banks have IN the aGgre-
gate been continually short for sew
eral years and this is he Erst aD-
stract in many months n WIFI ~ y
made to appear that they have fail
lawful reserve. The twelve Chicago
banks are in the aggregate short while
the forty-one New York bann5 afe
shown to have a cash reserve OF al
most 30 per cent
It is necessary to remember and u
may be necessary to remind those VINO
are not familiar with the suDJ1tt, that
there is a difference between Whas ~
known as the lawful reserve and O
cash reserve In all banks except The
sixty central reserve banks or new
York. Chicago and st. Louis. In THESE
banks the cash reserve and the laWlui
reserve are the same but In the 29O re-
serve city banks the cash reserve may
be only one-half the lawful reserve ana
in the 1882 country banks the cash
reserve may be only two-fifths OF the
lawful reserve. This difference is oc-
casioned by the provision in the bank
law that permits the country banks,
that are required to hold as laWIul
reserve only Is per cent OF their oe-
nosits to deposit three-ffths OF TINS
reserve in so-called reserve easen.)
banks and permits the reserve city
hanks. that are required to hold "a
ner cent Of their deposits, TO -deposi'
n reserve (agent) banks one-naiI O
tb;s reserve. To express 1T In another
way the central reserve banks are re
nuired to hold cash reserve OF ~
ner cent. the reserve city banks ~
nor cent and the country banks ONLY
6 per cent.
This ought to be well understood
This permission of the law is a yer!
gross and a very grave violation Q
tha teaching of banking experience 70
almost hundred years. Such de
81 s,dstts when made become like all otn
or deposits in banks, part OF the as
sets Of the so-called reserve agen
bank and cease. to be IN any rea
banking sense a part OF the reserve s z
the bank making the deposit. In
onlv real reserve any. bank has IS IN
cash Of which it has actual contro
How long would country bank VII
only six dollars, or reserve cH
bank with only twelve and one-na
dollars out of each one hundred 40
lars Of deposits stand against pam
among its depositors? A bank thoue
perfectly solvent and with no laiss
cash reserve than this would De quici
" compelled to close its doors IN u
face Of a run. This provision OF tI
law is not only dangerous but IT
infamous. One such bank in any con
munity might infict great injury az
loss mon it's own depositors AMI ais
unon the business Of a community an
other banks in it. This was the w o,
Of 4 congress in the sixties, that, III
most Of them since, mad little know
edge Of banking and financial econon
ics n was controlled by the represel
tatives Of the New York banks WI
devised the scheme in the interest
their own banks, and without any 7
gard whatever to the public welfai
The same influences have been at !,
bottom of almost all financial legisl
ton from that time to this and nc
nc The result of such legislation a.
their manipulations they have alme
complete control not only OF the bu'