The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1904-06-18

pet" and the people acting through
their representatives in congress are
averse to increasing its privileges and
slow in conserving to amendments to
enable it to compete with the powerful
trust companies in some fields, and
| with state and private banks in
others. These are all allowed privileges
denied to national institutions. These
state and private banks are permit
ted to loan on real estate, and in
many states no restrictions are i'm
posed regarding the amount that may
be loaned to one individual. National
banks in country districts especially,
Ineed permission to loan on real eS-
tate. Twenty-Five per cent. of capital
and surplus could thus be safely en-
ployed with advantage to both the pa
iron and the stakeholder.
A bill permitting loans of this
character was reported favorably by
the banking and currency committee
timent in favor of this bill is by no
| means unanimous, many conservative
bankers claiming that all experience is
against the plan. Some national bank
examiners favor it, but Nh T. p. Kane,
| deputy controller of the currency, with
many years practical experience, and
opportunity for observation. takes the
negative side of the proposition and
declares that real estate mortgages
are very unsafe and undesirable secu-
rity for a national bank to hold as col
lateral for loans, and that the national
system would be very much weakened
by an amendment to the law permitting
such loans to be made. On the other
hand the fact remains that many
state banks have at all times loaned
successfully on real estate.
The objections briefly stated are
that such loans are not convertible. in
other words are not 'quick assets"
This objection applies to farmers notes
in general, and it is needless to say
that secured paper has advantage over
the unsecured always. Under present
conditions the farmer applying for a
loan on his farm is either turned
down or the loan is made on his naked
name. If misfortune Overtakes the
farmer, the banker finds himself rele-
gated to a second mortgage, when but
for this unhealtful restriction he
might have had a first. The time of
such loans should be limited and the
amount of the loan should not exceed
one-half the value of the land, as APP
praised for taxation.
In my judgment the proposed amend
ment to the National Banking Act
should be classified as needed legisla-
ton"
New Basis for Circulation Needed.
new basis for the present popular
bond secured currency must be pro-
vided if it is to be long continued.
The Philippine bonds and the proposed
issue of the Panama canal bonds should
be made available for this purpose. A
strong effort in this direction was
made in congress last winter, but
nothing was accomplished. 1t is be-
sue is finally authorized this provision
will be embodied With per capita
circulation of SOL 90 all in good money
there is no crying need for more cur
rency at present, and it is worthy of
note that with the rapid and enor-
nous accretion of gold, circulating
| chiefly in the United States. there is
less talk of elasticity and emergency
circulation than was heard a year ago
and that the demand for asset curren-
cy seems to have faded utterly away
Congress at its last session at
tempted no financial legislation, be-
ing satisfied apparently to stand pat
on this as on all other issues during
the presidential campaign.
Another needed amendment to the
National Banking Act is one permit
ting loans of more than ten per cent
Of the banks capital to one individ-
ual. The present provision thus limit
ing loans, is regularly and systematic
cally violated by practically all bank
ers and the infraction if not enforced
would impair the usefulness of all ma
tiOnal banks and deprive them O.
much profitable business. 1t is deaC
wood and should be Topped off.
In the main the National Bank Ac
while still imperfect is the best tn,
country has ever known. It's provi
sions are complete, plain. simple anc
comprehensive, and it has been describ
ed as "a legal and controlling code o
bank life and morals"
States could not do better than us
: 1t for guide in preparing bankin,
: laws. The nation is made up of FEEDER
= al units, and laws generally and banl