Omaha daily bee., 1906-07-07
vANDERLPs ASSET NOTE scHEME.

VANDERDIPS ASSET NOTE SCHhME'
The address of Frank A. Vanderlip,
president of the great City National
bank of New York. before the New
York State Bankers association, urg-
ing an organized bankers movement
for an asset currency is a typical ex-
preston of the eastern banking in
terest on this subject. 1t is typical in
its vagueness, assuming that 'the plan
may take one of dozen forms" The
Idea of bank note issues on assets
alone, unsecured by government
bonds, has been put forth from eastern
banking quarters by a multitude of
advocates, but the diverse schemes
have been almost as numerous as their
authors. But no particular scheme
which has been worked out in detail
has yet received the general assent
even of the leading bankers of the
eastern money and exchange centers,
while the judgment of the bankers of
the country as a whole has been un-
favorable to all of them.
There is no reason whatever to ex-
pect a different reception Of an eclectic
system that any committee of New
York bankers could put together out
of parts taken from these innumerable
asset-note schemes. Experience in
this country with bank credit notes
from colonial days down TO the civil
war, in contrast with national credit
notes since, has been such as to
place, at least for a long time to
come, insuperable difficulties in the
way of return to the former. no mat
ter what provision may be made for
redemption. If there we're no other
objection, the complications of great
New York banking administration
with colossal promotion and specula-
tive interests invest with suspicion
their urgency of asset notes for the
purpose of circulation expansion. al
though it is generally put forth under
the guise of f1exibility. Undoubtedly
the rightly of our note volume does
periodically involve strain, but 1t is
at the same time a protection against
the hazards which inhere in those
complications. Not until banking in
the eastern centers become assuredly
more divorced from commitments or
Identification with speculative manipu-
lations is any scheme in their interest
of bank notes on bank resources likely
to be even patiently considered by the
bankers of the country generally.
Mr.. Vanderlip likewise exaggerates
when he declares that 1.-The RESPONSE
bility is on the bankers of New York, &"
although such is the feeling and the
assumption with which they are prone
to approach such questions. Western
bankers have been gaining relatively
at a remarkable rate the last decade
or two, and they and their brethren
in other sections outside of New York
have interests and responsibilities in
the aggregate enormously greater, and
those interests and responsibilities,
too are less involved in speculative
entanglements. In fact the eastern
desire for an expansive system of bank
credit notes has been growing as the
eastern banks have become depos-
itories for surplus western funds
which are periodically heavily drawn
upon. Accordingly western bankers
associations. like those of Nebraska
and Wisconsin last year, have quite
generally pronounced emphatically
against Mr.. Vanderlip's innovation,
believing that their interest, upon the
whole, under present conditions, calls
rather for memorable security of bank
note issues, even at the expense of
elasticity.