Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1906-10-17

Louisville, Ky, Oct. 11.-Leslie NJ.
Shaw, secretary of the treasury, adj
dressed the Kentucky Bankers as
sociatiOn her last night. He argued
for a larger delegation of authority to
the treasury department, so as to en-
able it to more adequately regulate
the money market and guard against
over-speculation in times of plenti-
tude of II Jney. or against financial
stringency when money is scarce.
This present law expressly makes
national banks the fiscal agents of the
government, and authorizes the de-
post of public money therein on any
security satisfactory to the secretary
of the treasury said Mr.. Shaw.
The amount of reserve to be car
ried by national banks is now fiXed
by statute. / think TINS should he
left with the secretary OF the treas
ury to determine from time to time
and as the exigencies of the case re-
quire. A statute requiring twenty
five per cent reserve IN cities,
and fifteen per cent reserve in
ordinary country banks, is, to say
the least, rigid provision. Evident
ly it as not the intention of congress
that this reserve should never be en-.
croached upon. The term reserve i'm
plies that it shall be used when neces-
sary. If the statute required the
secretary of the treasury to keep a
reserve of ten tons of coal in the
treasury building, no one would be
foolish enough to criticise it's use in
case of a prolonged railway blockade.
The present law authorizes the
comptroller of the currency to notify
any bank that has encroached upon
its reserve to restore the same within
80 days If the bank fails so to do,
the comptroller may, in his discretion,
with the approval of the secretary OF
the treasury, that is, in the discre-
tion of the secretary, proceed to liquid
ate the bank. This is abundant au-
thority for the secretary of the treas.
ury, in case of severe financial strain
! to notify banks that they will not be
proceeded against if they do not pro
| tect the business interests of the
country by encroaching upon their re
serve. That is exactly what the re
serve is for. This has been done in
| only one instance, and that a very Sc
we're case. Some criticism arose from
those who desired to criticise, but nC
| lawyer ever doubted the authority
and no prominent business man ever
/ doubted the necessity in that particu
| lar case.
In my opinion. it would be both
wise and safe to clothe the secretary
/ of the treasury with authority to re,
| quire banks to increase their reserve
| at certain times, when money Is re-
/ dundant, and to expressly permit the
/ maintenance of a somewhat lower re-
/ serve at other times Money is FIRE
quently dangerously plentiful in sum
! mer and dangerously scarce in the fall
and winter. Speculation is encour.
aged by low rates of interest, some.
times below one per cent in July AMI
August, and thereby much money EN-,
ployed which is subsequently needed
| to meet the demands incident to fall
and winter commerce Cooperation
among banks cannot be secured, ex
cept by the direction of some one maa
One banking institution viii not de
prive itself OF legitimate profits, while
making provision for the future, which
will inure to the benefit of all alike
If this additional authority were
granted the reserve of the country
could be increased in midsummeI
from 10000 900 to $100,000,000, with
out affecting business in any way, and
in the fall and winter the ordinary re
serve could be decreased, and in thif
way a very marked element of elias
| ticity would be provided"