Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-05-05
WHEN ADDRESSING the MULE.

~ It Is barely possible that there Will
sIyet be 4 currency bill enacted into Inv
ssYby congress at the present session
81 What Is known as the Vreeland bill Is
III fast gaining favor because of Its sim
s. plicity and businesslike directness. 1t
81 provides for a national clearing house
association which, in times of emery
81 ency, shall issue currency for it's mem
4 fbers secured by = deposit Of approved
81 assets In the form of commercial pa
II per. bonds and notes Of such kind as
81 national banks would have In their
Il possession during the regular course of
3business. This Is exactly the process
& followed by the banks which join their
ftOcal clearing house associations. 'sx-
foept that the currency obtained Will
q Is i regular national bank note In
aatead or clearing house certificates.
q This kind Of bill is simply the adj
n dress Of Missourian to his mule in
Il class Of rhetoric which the mule
4 understands. In effect 1t is asset cur
rency with the prior lien upon assets
Tor security: thing which bankers
themselves have been WONT to look
upon with suspicion. But we have had
I clearing house certificates, and bank
4 ers understand now how nicely they
work. II all they've got to do under
the new law is to put up securities
with the clearing house, and take out
regulation bank notes under per
cent tax, the thing Is so simple ano so
regular that bankers will approve Of
II
Tbs reformer who proposed that
hanks sbe allowed to issue currency
based upon their general assets and
secured by q prior lien or first mort
gage on the assets OF q failed bank, as
ID done under the time honored Scotch
SYSTEM In vogue In Canada, alarmed
the banking fraternity. 1t was as tho
some tenderfoot had addressed the
Missouri mule in broad Boston
dtawl. The mules ears lie backward
and he balks. But ask the banker to
nut up securities with clearing h,use
association and issue currency gar
anteed by something which looks like
collateral, and it is as tho the Mis-
5 lsourian had spoken gently to the mule
In the vernacular that makes street
tSllighss unnecessary at night. The
! silrluie understands and is willing to
pull
III Some genius should now adopt the
81 same successful method Of approach
n Ing the guarantee of bank deposits. 1t
a has been little more than six months
u since banks stood together in their To-
Zeal clearing house associations and
n guaranteed one another's depositors.
q This was wise and conservative bank
Ing. It helped weak banks over a
Il dangerous piece of road and protected
81 the whole banking situation by allay-
ling public alarm. Some one can now
Sicome forward with bill to have a
stapecial clearing house reserve to be
q set aside by the national clearing
HOUSE association for the absorption
ss.sjof failed banks among its members. A
n slight tax on deposits and the interest
Icollected on circulating notes could be
fused, and a fund established which
& would float every bank that might go
s TO the wall without loss Of a dollar to
tdepositors. Under such a law, "lMen-
her of the National Clearing House
Association" would appear under the
Inquiries OF capital and surplus in every
V banks advertisement. But insurance
pf bank deposits or government guar
Antee, of course, is nothing but a
sra1y reform.