, 1908-05-05
BANKING DISCUSSED.

Mr.. F. b. Sheldon, deputy state treas
urer, read a very able paper upon pos.
sible improvements in our banking sys-
tenn before the Young Mems Literary
club at Cheyenne last Friday night.
Mr.. Sheldon has had much banking
experience and anything he might
write along this line would be of value,
for the reason hat he has been a stu
dent of the system as well as a practl,
cal man in the harness. He believes
that the death of the Aldrich bill was
no great calamity to the nation, as II
did not reach the trouble. A mere in,
crease in the currency would not avail.
The very increase would discredit the
bank putting out such notes and cause
public alarm.
A few paragraphs from Mr.. Shell
don's paper are quoted:
so long as the government guarau-
tees the national bank notes, of what
ever form of issue, the notes will prob
ably circulate freely under ordinary
is the issuing of any kind of currency,
whether the direct obligation of the
government or guaranteed by it, to
that extent that the credit of the gov
eminent will be brought into question
and the-notes thereby discredited. And
right here, it seems to us, We come 10
the fundamental question in the whole
matter-and that is the question of
confidence. Circulation must never be
increased to that extent that the public
will not accept it without question. In
times of financial stress 1t is not SO
much a lack of circulation that causes
trouble, as it Is a lack of confidence.
There is now a sufficient amount OF
money in circulation to transact the
business of the country under ordi.
nary conditions, but let confidence be
shaken and no amount of increase will
suffice. Everyone holds on TO what
he has and acquires as much more as
possible, and an increased supply, es
pecially of a kind not fully accredited,
will bring no relief.
Another improvement demanded as
a result of recent events, is that OF
greater security to depositors in banks,
A government guarantee fund. secured
through a tax upon all banks, is advo'
Gated and in most respects seems i'm
practicable. Objection is made to this
plan upon the ground that it places q
premium upon ~rascality, and that the
honest and well conducted bank would
be taxed to pay the obligations of dis
hnnnSt anl nnusiSa1v cnninntn cd ipSff
tutions. We believe, however, that
the indirect benefits to all banks would
Offset the disadvantages of this plan,
and that a stricter surveillance of the
operations of all banks would reduce
dishonesty and r~ascality to a minimum.
Banks associate themselves together
for mutual protection against other
forms of rascality, such as counter
feiting, forgery, etc.. tax them
selves for this purpose, and in the
bankers bill before congress, abova
referred to, a tax upon all banks is
proposed to redeem the circulating
notes of failed banks. Why not, then,
a tax to pay the depositors as we'll?
:
In a discussion of these questions
we are, perhaps, too much inclined
to look at them from the standpoint
of the people only. The fact should
not be lost sight Of that the banks
play an all important part in the bust
ness OF the country; that they are a
prime necessity in the commercial
world; and that 1t would be lmpossi-
BILE for us to do business without them.
They deserve the greatest considera-
tion in the framing Of laws for their
government and nothing should be
done to lessen their usefulness or uu-