The news-democrat. (Providence, R.I.) 1906-1909, 1908-01-18
(Continued from Page one.)

Continued from Page One)
The club, dined al 715 on the second
floor OF the Narragansett hotel. After
the dinner J. Edward studley. president
OF tho club. introduced the speaker OF
the evening, saying i'm part:
CHAIRMAN sTUDLEY.
"The question pertaining to banking
systems. and particularly the currency of
the country, seems 10 Inc more than ever
likely to receive intelligent attention from
congress, which will result in positive
decided and permanent action. The cir
cumstances Of the past three months have
been so peculiar that intelligent minds
have been directed TO tho subject. an
ticipating decisive action
'Mr. Capron once said that the late
Thomas b. Reed told him that IL any FIVE
reputable citizens of the United States
would lay down a system which would
work for the betterment OF the banking
laws and would agree upon It he would
do his best TO put it in operation
There seems 10 be a wide divergence
OF opinion as to the Ills OF the present
system and the method of cure. No one
has given a more exhaustive study to the
situation than he who has so long pre-
sided over the committee on banking and
currency OF the house OF representa-
tives."
Chairman Fowler, who was received
with applause spoke in substance as fol-
lows:
IF there are 100000 deposltors in Provi-
dence there are probably not 200o who
know what a bank statement means.
They all think that their deposits are
safe all the time, until
Should the people not be protected?
Should not the banks themselves be pro-
tected from this same possibility? With
ha hot 80 oh.
20 districts a deputy comptrolled. and
with 20 chairInen To discuss the currency
or the country; with an autonomy OF
banks or commercial zone. and OF fed
eral control. whatever might happen In
any one locality you could say Peace.
be still; there Will be no panic. no hoad-
age
WHAT rs WRONG.
Before pointing out what ought to be
done, let us inquire what is wrong
"First-There is no consistency or uni
formity In American banking as a whole.
The resources OF the national banks
are S,416.O10.0o0. while the resources OF
all the others are sli. les O00, 600 or total
OF N96i5,o000O0. The number OF deposi-
tors is I'm the millions and our annual
output Is $4,000, 0O0.000 Our national
banks. In some instances. take savings
accounts. Some OF them have a savings
corner. or trust company conveniently
located to work in harmony with them
mus, too little Is actually known about
the conditions OF our banking business.
GOLD RESERVE FOR PROTECTION
These vast credits OF the people should
be protected by gold reserves-the only
true touchstones where gold is the stand
ara OF value And yet 1t is probable that
at least one-uuarter of these credits have
under them as reserves more promises 10
pay the debts OF the government. which
| are due Is years hence
Second-To economically and adequate
! ly provide for the production, transporta-
ton and sale of such vast amount Of
merchandise as are producing annti-
ally we should have simple and scien-
tile monetary system consisting of gold
Tor our bank reserves. having converted
our United States notes into gold certif-
Gates, bank credit currency redeemed in
gold, for our larger bills. providing the
true medium OF cash exchanges. and sill
yer for our smaller bills and subsidiary
coins
"Third-We should have system of
current bank credits that will always.
with unerring certainty. come into exist
ence with business transactions precisely
as checks and drafts do, and disappear
when no longer needed: a currency that
Is backed up by gold reserves. precisely
based upon the consumable commodities
or the country, the things we eat. use and
wear, and. therefore, coming into exist
ence with production and disappearing
with consumption--the quantity OF notes.
never too great. never too small, but al
ways just adequate TO the demands OF
trade and commerce
"Fourth--To every candid person who
has taken time 10 reflect II must be ap-
! parent that in all normal times all banks,
| little and big, grow directly in proper
ton TO the power OF the personality i'm
the officers and directors Of the various
| banks and not at all I'm proportion to the
capital these banks may have Indeed. IL
may be laid down as an axiom that busi-
ness will rise and fall with the various
| bank managements. the capital remaining
| the same, and that mere bulk OF capital
will have little influence upon the growth
| OF any banking business. Men are crystal
llzed into banks and banks symbolic the
men who stand at their head or have put
| their great lives into them.
NOT UNSoUND BANKING.
''rhe claim that a guarantee OF deposits
| Will lead TO unsound banking is more
| than met by these provisions OF tho bill
now before the committee on banking and
| currency.
| "Ffrst-The banks cannot pay more
! than per cent upon commercial accounts
| "Socond-Each redemption district has
| n board of managers consisting OF seven
members who direct all bank examina-
/ tons.
"Third-One-tenth OF the losses IN any
| district Is paid by that district before the
! general guarantee fund is charged with
| any loss. and Of such remaining loss that
district also pays its proportionate share.
| 'Fourth-Could IL be possible for a
| banker 10 make an unsound loan because.
| forsooth. his deposits were guaranteed
| when he knows he must stand the loss
| unless his bank literally fails? When he
| knows his profits will be cut that much {?
| When he knows his reputation is at
! stake2 Success, profits and reputation,
| less than now.
| "Fifth--The government should cease
| 20 be n disturbing factor I'm the trade and
| commerce OF the United States. and
should deposit its receipts from all
| sources every day with the banks OF the
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