Twice-a-week plain dealer. (Cresco, Howard County, Iowa) 1895-1913, 1908-09-29

der Was out of commission. iexpecte
edsewlse. The only way to get head-a
It started to right; twenty feet more
have the twenty feet"
runs caused by some rumor started
| through malice. Many an honest
banker has had his heart broken By
senseless runs and has groa6ed in
spirit as he realized that gross injus
tice has been done as reward for ear
nest and able keeping Of the trust re-
posed in him by his depositors.
The Barring Failure.
When a dozen years ago. Barring
Brothers. of London suspend, d, it was
due to that very espionage by other
bankers to which Mr.. Gage refers.
The Earrings had embarked in many
South American enterprises, some Of
which were manifestly unsafe
The governors of the Bank of Eng
land, sensing the danger, refused to
accept securities backed by them as
basis for the issuance of bank notes
under the custom of that country that
action never has been adversely criti-
cized in any country, although it has
been discussed ever since the world
over
| Modern business is conducted on the
basis for the issuance of bank notes
| tie actual money passes from hand to
hand.
| Modern System of Credits.
| You go to your bank with bundle
of checks and drafts and deposit them
to your credit. Against that account
thus opened, you draw checks. They
| pass into the world of business, are
| accepted at face value, and circu-
late virtually as does gold, silver and
currency. If you pay your bills in
checks, often you pass through weeks
at tune when you have only trihe
Of loose change in your pocket for
street car fare and the small things
you need from day to day costing too
little to bother to draw check.
"A check cancelled is voucher"
has become Z maxim in the business
| world.
Complications OF the System.
This complexities business and forces
all banks to associate themselves In
clearing houses. and probably the pub
lie would be amazed were they to
know at times how sharply the clear
ing house committee looks into meth
DDS employed by its members.
| In the panic that began last October,
funds were carried from bank to bank,
taken ostentatiously through the front
doors, that depositors might know that
other banks believed In the soundness
of the institution which had been at
tackled by run, and performed al
most every essential Of the guarantee
system.
Why?
Simply because the modern business
system is so complicated and 80 little
| actual money passes current that each
bank must know that the others are
properly safeguarding themselves and
also that they are permitting the car
rying of accounts by depositors whose
paper may always be depended on as
worth face value.
Beneath the Surface.
So beneath the surface, one could
witness the clearing house associa-
tions examining collateral, securities
and assets and often serving notice
on a given bank that the associat on
will require some change in methods
on penalty of refusal longer to clear
for that bank
Banks Out of the Association.
How about banks not in the associa-
ton! Many perfectly sound banks are
not directly IN the clearing house.
They clear through another bank
which does belong
Precisely the same rule appl es to
them, for, when need arises, tile asso
citation serves notice on the member
bank which clears for the non-asso
citation bank as to what will have to
be done; and it is done promptly, too
in every instance.
Bank Book Should Be Worth Face.
The essence of the guarantee plan is
that a bank book should lie worth its
face always. An entry In pass book
should not constitute tie assumption
Of risk by the depositor and the CIV
ing of wide latitude to the banker
Such entry should be recognized as
just as actual an asset as bank note
Also, proper arrangements must be
made for the continued espionage OF
banks by other banks.
Lastly, AMI uni"e as important.
banking laws mrst lie enforced; over
certticalion must lie ST, picd; loaning
Of funds IN nAtion.: lIalhS on obvious
ly speculative Ar,,' 'es must cease:
and other reiF,ls must b. wrought to
invest the II ;k.aE s,stem Of the
country y = tu $50 ,ote colfhe" 20
Whirl, II i IN a sop
to an :,
A Sure-enough Knocker.
| T n Goodwin af aidsvillo NJ ~