Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1908-10-09

tcouS. delays III getting thcir money
which now ury experience when
banks fail.
Eut. that fewer failures would o.
cur surely would he one OF the re-
suits Of such law. Everyone knows
tlAt many runs are prcc9.tatcd on
banks which are absolutely soInd.
tive. conscientious in caring for the
money OF his dCpoStors. has Suffc:ci
runs caused by some runUr started
through malice. Many an honest
banker has had his heart broken hy
senSelcSS runs. and has groancd in
spirit as he realized that gross injus-
tice has been done as reward for ear
nest and able keeping Of the trust re-
posed in him by his depoSitors.
The Barring Failure.
When a dozen years ago. RarinS
ErotherS. OF London. suspended. il was
due 10 that very espionage by other
bankers to which Mr.. Gage refers.
The Barin-s had embarked in many
SoIth American enterprises. some OF
which were manifcStly unsafe.
The governors of the Bank Of Eng
land. sensing the danger. refused to
accept securities backed 10y them as
basis for tie issuance of hank not"j
under the custom of that country: that
action never has been adversely criti-
cZci in any country, although il has
been discussed ever since the world
over
Modern business is conducted on the
basis for the issuance of bank notes
Tie actual money passes from hand to
| hand
Modern System Of Credits.
You 20 to your bank with bundle
of checks and drafts and deposit them
to your credit. Against that account
thus opened. you draw checks. They
pass into the world OF business. are
accepted at face value. and circu-
late virtually as does gold. silver and
currency. II you pay your bills In
checks. often you pass through weeks
at time when you have only a triiic
Of loose change in your pocket for
street car fare and the small things
you need from day to day costing too
little to bother TO draw n check.
"A check cancelled Is voucher"
has become maxim In the business
world.
Complications OF the System.
This complexities business and forces
all banks to associate themselves In
clearing houses. and probably the pub
lie would be amazed were they to
know at times how sharply the clear
Ing house committee looks into meth
DDS employed by its members.
In the panic that began last October
funds were carried from bank to bank.
taken ostentatiously through the front
doors. that derosltnrs might know that
other banks believed in the soundncsS
OF the institution which had been at
tackled by run. and performed al
most every essential Of the guarantee
system.
Why?
simply because the modern business
system is SO complicated and SD little
act money passes current that each
ban, must know that the others are
properly Safeguarding themselves and
also that they are permitting the car
rying OF accounts by dcpositors whose
paper may always be depended on as
worth face value.
| Beneath the Surface.
So beneath the surface, one could
witness the clearing house associa-
tions examining collateral. securities
and assets. and often serving notice
on n given bank that the association
will require some change in methods
on penalty Of refusal longer to clear
! for that bank.
Banks Out OF the Association.
How about banks not in the associa-
ton! Many perfectly sound banks are
not directly IN the clearing house.
The, clear through another bank
which does belong.
Precisely the same rule applies to
them, for. when need arises. the asso-
| ciation serves notice Oh the member
bank which clears for the non-asso-
citation bank as to what will have to
be done; and ii Is done promptly, too,
In every instance.
Bank Book Should he Worth Face.
The essence OF the guarantee plan IS
that bank book should he worth its
| face always. An entry In pass book
should not constitute the assumption
| Of a risk by the dcpositor and the Civ
ing Of wide latitude to the banker.
Such entry should be recognized as
| Just as actual an asset as bank note
Also, proper arrangements must he
made for the continued espionage Of
banks by other banks.
Lastly. and quite as important.
banking laws must he enforced over
/ certitcatiOn must he stopped; loaning
: of funds in national banks on obvious
~ speculative schemes must cease;
and other reforms must be wrought to
! invest the banking system of the
co-ntry with that complete confidence
Which. II induced would put stop
to all nervousness by dcpositors.
| 10000 . ssssse .
NO scAREs THIS YEAR. o