Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-11-02
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reserve in hard money against these
notes that the law required, for its
deposits.
If asset currency had been permitted
the New York banks would never have
needed to stop shipping currency nor
would have the Chicago banks, ana
had these banks holding the balances
for all the rest of the country been
given some elasticity, some leeway,
the country banks would never have
felt any stringency. The asset DahR
notes would look just like the paper
money which the public handles TO-DAY.
They could have been paid out as
currency with never a question ana the
big city banks could have added Az
per cent to their present bond secured
circulation and then another sum equal
to 12b per cent of their capital. IL
any bank thus putting out bank notes
on the strength Of its own credit had
failed or should fail before all OF 1ts
new notes were retired and canceileo
the tax on the currency of all the
banks in the United States would De IN
the hands Of the government as an m
surance reserve with which to redeem
the notes Of any such faiied peih'
And the experience of bank failures IN
this country for 100 years past mas
sbown that such tax would cover
the risk many times over
But the country banker has feared
that the city banks once getting TINS
asset currency out. would never retire
1t and then next year the whole coun-
try would be at the end OF It's rope
again. Just as soon as the crops ilao
been cashed and country banks began
to let their balances In the cities pie
up, the city banks would begin to hg-
ure like this: why pay per cent on
these asset notes Of ours when we can
get all the deposits we can use from
the country banks at per cent? and
the retirement would begin. We know
that 1t would begin because just across
the line Canada uses asset currency
every fall and it works that way. To-
day the Canadian bankers are laugh
ing at their brothers in the United
States; actually laughing at US.
go far as the public was concerned
the average man would never know the
difference between an asset note or
bond secured note when he handled
two IS bills. He would know that his
government at Washington had agreed
to redeem either one in hard money
and he would never ask any questions.
In the one case the government would
hold its own bonds as collateral Tor
the indorseinent 1t had signed on
some banks IS note and in the other
1t. would hold. an insurance reserve
called redemption fund paid in by
the banks issuing the asset notes. So
far as the country banks are con-
cerned they would have less cause to
question the asset notes of city bank
than they would to question its drafts
or bills of exchange, since in the one
case there would be nothing but the
credit Of the bank back Of 1t, while
in the case of the asset note the same
city banks credit would guarantee
payment and Uncle Sam would APP
pear as endorser on the note. besides.
II the country banker would avoid a
stringency, which he feels has been
brought onto him from no fault OF his
own. he should betome student Of
finance and listen to the wisdom OF
his secretaries Of the treasury, of his
text book authors and of the great
men who have risen from the country
banks to high positions in the great cit
les. He should quit his opposition in
the national conventions Of bankers
and let us have asset currency.