The Meeker herald. [volume] (Meeker, Colo.) 1885-current, 1908-10-17

banks row, 70 tAf 0B couceru1 eBphO1
age maintained BY one over another
The important difference, however
would be that depositors would not bs
subJecf to the annoying. often disas
trous, delays In getting their money
which now they experience when
banks fail
But, that fewer failures would oe
suits Of such 4 law. Everyone known
that many runs are precpltated %
banks which are absolutely sound
Many a man, faithful. safe. conserva-
tive, conscientious In caring for the
money Of his depositors, has suffered
runs caused by some run,or started
through malice. Many an honest
banker has had his heart broken b.
senseless runs, and has groaned In
spirit a. be realised that gross injus
tice has been done as reward for ear
nest and able keeping Of the trust re
posed In him by bis deposItors.
Tho Barring Failure.
When dozen years ago. Barring
Brothers. Of London, suspended, 1t was
due to thaA very espionage by other
bankers to which Mr.. Gage refers
The Barings Had embarked In many
South American enterprises, some Of
which were manifestly unsafe.
The governors Of the Bank OF Eng
land. sensing the danger. refused to
accept securities backed by them n
basis for the issuance Of bank notes
under the custom Of that country; that
action never has been adversely criti
cixed In any country, although It has
been discussed ever since the world
over.
Modern business IL conducted on the
basis for the issuance Of bank notes
tie actual money passes from hand to
hand.
Modern systen 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 m does gold, silver ind
currency. II you pay your bills In
checks, often You pass through weeks
at time when you have only tribe
Of loose change in your pocket fos
street car fare and the small things
you need from day to day costing toe
little to bother to draw 4 check.
"A check cancelled Ii voucher,
has become a maxim in the business
world.
Complications Of tho System.
This complexities business and forces
all banks to associate themselves 10
clearing houses, and probably the pub
lie would be amazed were they tc
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 Internationally through the front
doors, that depositpEs might know tat
other hanks believed In the soundnesa
Of the Institution which had been ct.
tackled BY run. and performed Al
most every essential Of the guarantees
system.
Whyf
Simply because the modern business
system Is so complicated and so little
actual money passes current that each
bank must know that the others are
properly Safeguarding themselves and
also that they are permitting the car
rying Of accounts by depositors whose
paper may always he depended on AZ
worth face value.
Beneath the Surface.
So beneath the surface, one could
witness the clearing house associa.
lions examining collateral, securities
and assets. and often serving notice
on given bank that the association
will require some change in methods
on penalty. of refusal longer to cleai
for that bank.
Banks Out of the Association.
How about banks not in the associa.
tion? Many perfectly sound banks ara
not directly in the clearing house.
They clear through another bank
which does belong.
Precisely the same rule applies ID
them, for. when need arises, the asso
citation serves notice on the member.
bank which clears for the non-asso
citation bank as to what will have to
be done: and 1t Ii done promptly. too,
In every instance.
Rank Book Should he Worth Eaos.
The essence of the guarantee plan is
that n bank book should be worth Its
face alwuys, An entry in 4 pass book
should not constitute the assumption
Of risk by the depositor and the CIV
ing Of wide latitude to the banker,
Such entry should be recognized AZ
just rs actual an asset as n bank note.
Also, proper arrangements must be
made for the continued espionage d
banks by other banks.
Lastly. and quite as Important
banking laws must be enforced; over
"A a -.