Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-01-22
ADVOCATES
. CENTRAL BANK PLAN
George r. Roberts, of Chicago,
Lectures on Finance and
Proposed Remedy
Many BANKERS HEAR HIM
Searchlisht Club Is Host to Promi-
nent Chicago Banker, Who Gives
Clear Explanation Of Central Bank
Plan as Method Of Avoiding Recur-
romeo Of Financial Upheaval.

Plan as Method OF Avoiding hecur :
renee Of Financial UpheavaI.
"Inadeuuate and obsolete" Is the
way President George X Roberts OF
the Commercial National bank of chi
cago, and ex-director of the United
States mint, described the existing
money system of the country IN iu-
cid and clear presentation of the recent
financial situation and its remedy MI.
Roberts advocates strongly the estab-
ushment of a central bank of issue as
the simplest and safest meth OF
preventing a recurrence such as the
country passed thru in the fall.
The largest Searchlight club audi
ence of the winter, before whom Mr..
Roberts spoke, heard the lecture, at the
association rooms Tuesday evening IN
Guiding the visiting bankers, OF whom
there were many from the surrounding
towns who were the guests OF the To-
cal banks, the audience numbered fuzzy
$50. OF this Number more than loo
sat down to supper, which was served
by members Of the Ladies' auxiliary
Explains Banking System.
While parts of Mr.. Roberts TX was
a rehearsal Of much that has ready
appeared in print, especially With ref
erence to banks and banking systems
his explanation of the proposed rene
dies by which the country may be sup
piled with a SIZE abundant and elaS-
tic currency vas very clear and under
standable.
Mr.. Roberts opened by detailing the
principles of banking and their uses.
and the system of checks. drafts and
other negotiable paper by which or
dinarily 80 per centsof the business OF
the country is done.
Money Fails When Needed.
Mr.. Roberts said the country has
practically the same amount of mon
ey all the time, but the volume of BUS
mess at different seasons of the year
greatly differs. In the fall he said,
when the crops are on the move ana
merchandising Is at its height, more
money is needed. During the less ac-
tive commercial months of the sum-
mer there Is more money than Is need
ed. He declared it would be a benefit
il, during the dull money seasons. the
money not needed could be retired, to
be called back into use into the fall,
and at other times when there was an
unusual demand for 1t.
Touches on UpheavaNs
The speaker did not attempt to ex-
plain in detail the causes leading up to
the money stringency of last fall, al
tho he did credit to Augustus Heinz
Of Montana copper fame, and his fail
ure to meet his stock market obliga-
lions, with having been instrumental
in bringing the situation to a crisis.
He said Heinze's inability to meet his
demand reflected on the Mercantile
National bank of New York, of which
he was president. and reacted on all
the other banks Of that city with which
he and his associates were connected.
Following this, suspicion was aroused
against every bank of New York, and
it spread to other banking centers, and
eventually all over the country.
This came at just the time when the
cash reserves of the New York banks
were at their lowest point Unusual
demands from every quarter then
caused the banks to put in force the
protective measure of limited cash
payments. Mr.. Roberts said that to
many people the restricting of cash
H., &l,~ 1,a,,
just, but, he explained, it. was neces-
sary to prevent even greater losses.
Right to Issue Money.
There ought to be a system, said the
speaker, by which any solvent bank
could, at times of unusual demand for
money, have the right to issue money,
thus providing an elasticity in the
supply. He detailed the tedious and
slow method by which national banks
are now able to issue notes by de-
posting government bonds to the
amount of the issue. What we need,
he said, is short cut for the issue of
money, SO that banks might do it on
their borrowers notes used as Sc
curity.
Cites Examples Of Elasticity.
Mr.. Roberts cited the plan adopted
last fall by many banks in issuing
cashiers checks as an example of the
actual working out of a system Of the
issuance of negotiable paper, which
answered in every way what would
have been accomplished by an issue
of money. A similar result was ac-
complished in the money centers by
the issuance of clearing house GER
titicates, which furnished the banks
with line of credit
Remedies Proposed.
The speaker closed with cal ng
two methods of proposed rsnedies.
The first he mentioned was system
of note issues by all clearing hou'
banks, which would be required to
have a guarantee fund on deposit
with the United States treasury with
which to take up the notes issued by
insolvent banks. The plan also in
cludes a system of clearing house CEN
tiers, where each day each bank would
send it's notes to be exchanged, eX-
actly as is now done at clearing houses
with checks and drafts. An imitation
of any banks issue would simply es-
tablish against it debit in the clear
ing house, which would have to be Off
set by go6d money. Mr. Roberts said
such a system was in successful use in
New England for thirty years.