The Washington herald., 1908-02-20

vestment. and yet the amendment pro-
pose does not go so far as his argument
legitimately carries the Senator He
walks up TO the river. says that Il IS
much safer for himself and the public
10 be on the other side; that the passage
Is free from obstruction or danger; has
been often made and always with safety;
that it is perilous to remain on the bank
he occupies. and yet he refuses TO step
into the stream and wade across 10
security and prosperity. Possibly he is
waiting for some Democratic Moses 70
divide the waters so that ne can pass
over dry-shOd. My amendment requires
national banks. all national banks,
whether reserve or not. to keep in their
vaults two-thirds OF their reserves. either
in specie or legal tender. or one-half Of
that two-thirds In money and the other
half in the very bonds that the Senator
says will constitute the best assets Of the
bank. 1t is the first step In a programme
so heartily commended and so strongly
put by the chairman OF the Finance Com
mittee-
Bonds Easily Available.
1T has been said that this investment
in bonds would reduce the amount Of the
money reserves Of the bank. and hence De
o. no service whatever in strengthening
their position; that II a bank invested
per cent Of its deposits in these bonds
it could only use the bonds In an emerg-
ency 10 get 90 per cent OF these bonds in
the emergency currency. and that the
last state OF the bank would be worse
than the first
This might be true II the banks had
chi -
point 10 acquire these bonds, but the
class Of bonds mentioned in the bill.
State, county. and municipal. are found
in every State. and much Of the money
paid for them would find its way back
1 into the vaults of the banks. and, Incl
dentally. the interest paid on these bonds
would remain al home.
| Another advantage this amendment
would secure Is that In times Of panic
| the banks holding these bonds could
quickly secure emergency notes and meet
| demands Of their customers. Under the
present law. national banks not IN re-
serve cities are required 70 keep only q
/ per cent Of their deposits in money in
| their vaults. 9 per cent being authorized
| 10 be held in reserve banks II there IS
| anything more Intangible than a deposit
in a reserve bank in time Of panic,
have yet 10 know IT, You may call
spirits from the Vastly deep and get a
response as readily as you can get money
from reserve agent In times Of financial
distress.
Now. II this amendment is adopted il
| is nv opinion that the reduction Of the
amount that may be deposited in reserve
! hanks from 10 per cent Of deposits.
! and requiring these banks 10 hold two
/ thirds OF their reserves IN money. or
money and bonds. in their vaults. would
reduce the congestion OF money in the
great money centers by more than &c.,
o0009. so far as interior banks alone are
/ concerned. and 20 that extent reduce the
volume Of money largely employed in spec
ulative ventures The reduction in vol
ume Of currency at any given point
strikes the speculator or gambler. as the
4 President calls him. the first blow. So
that this amendment is in line with the
recommendation sent 70 rs by the Presi-
dent
Better Than Original section.
I think the amendment I have sug-
gestee IS much better than the provision
contained in the original bill. for If al
national banks should be required 20 keer
10 per cent OF their deposits in legal ten.
der in their vaults II would require q
very large Increase In the amount ot
money locked UP IN banks. not available
for loans and discounts. while the invest
ment Of half that amount IN bonds. as au-
thOrized by the amendment TO the bill
would give equal safety and better re-
turns 20 the banks. The interest on The
bonds so held would give a larger return
TO the bank holding them than any re-
serve agent could or should be allowed Il
pay as interest on balances subject u
J check"