Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-01-04

be placed IN control. II Doard OF gov
ernors, from what walks in life l ask
would they be selected, and what
would be, the influences likely to con-
troll them? Where shall the central
bank be located? II in New York,
what relief need Spokane and Des
Moines expect until after the needs OF
the many larger and more important
cities have been supplied?
I wonder If anyone has considered
the amount of capital that would be
necessary to enable one large central
bank to supply the extraordinary needs
Of twenty thousand commercial banks,
or the extraordinary demands Of COM
merce in forty-six states. A central
bank to be effective would require
branches in every important business
center. If these branches were to en-
gage in ordinary commercial banking,
existing institutions would of neces-
sity suffer, and If they did not en-
gage in commercial banking, they
would have little business to do dur
ing the major portion of the year, and
would find it difficult to pay expenses,
not to mention dividends.
I have found considerable sentiment
: in favor Of branch banking in cities
like Philadelphia, Boston, Chicago and
st. Louis, but the advocates thereof
have all opposed allowing a bank to
establish branches beyond the confines
of the state in which the parent insti-
tuition is located. When have asked
the reason, they have expressed the
fear that New York would place
i, ;,,t Ia3r at 1y haf
to want is the privilege of putting
from invasion from New York.
The Canadian plan has many adj
vocates, but it will not work advan-
tageously as an adjunct to our pres
ent system. The Canadian plan would
be a failure but for the branch bank
feature, and it would also be a failure
if there were any considerable num-
Der of commercial institutions in the
dominion, other than the thirty or
forty banks of issue and their
branches. In order to have the plan
effective, it must be adopted in its
entirety, and not as an adjunct.
The plan which to my mind presents
the fewest objections is to allow our
national banks to issue limited vol
ume of supplemental currency, subject
to q tax Of 5 per cent or 6 per cent
during the period of it's maintenance
/ deem it important that the supple
mental currency shall be identical in
form with some money regularly in
circulation; otherwise its presence
would alarm, and do more harm than
good I deem it important, also, that
it's ultimate redemption in gold be
guaranteed by the government. 1
realize that this is illogical, but the
American people have been schooled
to believe in government guaranteed
money, and any departure therefrom
would meet with very general dis
trust fatal to commerce. I, therefore,
deem it wise to supercede the state
1nent on the present bank note this
note is secured by United States
bonds" with the statement this note
is guaranteed by the government"
With this change the supplemental
currency to be issued by the national
banks can be identical with that which
is secured by deposit Of bonds. So
generally, so wellnight universally SOL
vent are our banking institutions that
the ASOVeTllllleHl Ouiu NC lethli5 Sll6
risk to guarantee the ultimate redemp-
ton of all this supplemental currency
and the proposed tax would many fold
cover the risk.
Those who think the government
should insure deposits can find no OBJ
lection to such a guarantee, for bank
note is almost identical with a certifi-
cate of deposit, payable to bearer on
demand and it would never be parted
with or paid out by the bank except
in exchange for something believed to
be equally good.
If the banks were permitted to issue
to the extent of an average of SO per
cent of the capital graduated, accord
ing to the size of the cities and towns
where the banks are located, the ag-
gregate volume would be approximate
ly $500, 100000. The great champion of
free silver is not recommending that
the government shall guarantee all
National bank deposits. aggregating
over $4,000, 100000. and this without