The Norfolk weekly news-journal. (Norfolk, Neb.) 1900-19??, 1908-04-24

iectlons that are raised against credit
issues 10y numerous Individual banLB.
II gives the system unity and cohe-
sion which can be had In no other
way II II should over prove desirable
"a uberuli2C issues 10y the individual
banks as may indeed be pussihl, She
central institution would hc desirable
as the most effective means Of supCr-
vision over them. Its service In this
respect has been twice dcmOnslr. ted
In This country
Flexible Currency the True Remedy
Give this country u flexible currency
system Ike that of GERMANY where
the volume was increased $4,000 600
10y the action of the central hauk In
one week last fall, and the banks of
the United states will meet all de
mauds from their dopositors and ask
no fayors. That is the true remedy
instead Of trying to persuade dcpus-
ltors not to ask for their money and
requiring the conservative and careful
banker 10 become ondorscr for his
reckless and incompetent rival.
Weakness Of a Deposit Guarantee.
The proposal to guarantee or insure
deposits Is an insidious one, but II
will not stand analysis The test q
any innovation is whether in the long
run 1t is economically sound, ovolu-
tionary in character tending to develop
permanently higher standards and
better results. This proposal is funda-
mentally wrong, because its influence
would not be to perfect the system
I'D r..S" its standard but to demon
alize I've .ystera by throwing the busi-
mess into tae hands OF the most I'M
worthy.
The hardest competitor in any bus
mess Is the rival who does not under
stand his business or know the lcgu-
mate margin required to do safe
ess and whose only method ~
ness into the hands OF the most IN
usual inducements. There is no buSi-
ness in the world that would not be
demoralized If the incompetent and
reckless people In II were able 10
make the pace for ALL And II the gov
eminent star =" behind every bank and
guarantees its obligations to the public
why shouldn't the deposits go into the
hands Of the people who would bid
most for them? The unsafe and HE
Ultimate practices in the banking bu-
siness today are directly traceable 10
too much rivalry for deposits The
business is subjected by this rivalry
to pressure Of expense which forces
even conservative bankers to an en-
ployment OF funds which they do not
fully approve This competition would
be more severe and disastrous if all
considerations touching the RESPONSE
bility of banks were removed. II rec
4.
are TO count for nothing in attracting
deposits how can 1t be otherwise than
unsafe and illegitimate practices will
become more common and more pO-
tent? The legitimate reward and pro
lection of the conservative banker,
which is a preference on the part Of
the bank depositor would be taken
from him and he would be forced to
meet the competition of reckless and
incompetent rivals on the same terms
or retire from the field. 1t is not for
the best interests of the community to
all calculations as to losses, based On
past experience would be worthless
as in ,.ca;ing what losses would he
unde. s2ch s.Stem.
Y is g. sued that the ioint liability
of all bankers would make each bank
er policeman to keep his competitor
| from illegitimate practices, but such
supervision would be purely theoreti-
cal under present conditions. One
banker has no authority now over
another and can have no intimate
| knowledge of his affairs. Before
bankers can be properly made respon-
sible for each others losses the bank
ing system must be so reorganized
that bankers as a class have powers
of supervision and discipline over in
divduals. There is no other way Of
accomplishing this so effectively as by
means of central bank, organized on
the lines here proposed.