Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-02-14
To Be Owned by the Banks and Not
by the Government.
PRIVILEGE OF REDIsCoUNTING
Secretary Of the Treasury to Receive
Such Paper When offered as
Collateral Security.

BALTIMORE. February 13.-The sew
enth annual dinner of the Baltimore
Chapter Of the American Institute OF
Banking was held at the Hotel Belvidere
this evening.
Among the speakers were United States
Senator Robert L. Owen Of Oklahoma
and United States Treasurer Charles II
Treat. Mayor Mahool delivered an ad-
dress of welcome to the guests and Gov.
Crothers responded to the toast Mary
land"
The establishment Of a national clear
ing house bank. to be owned by the
banks-not by one bank or by the gov
ernment-was advocated by Mr.. Treat.
The operations of such a bank, he said.
would seem to meet all the great bust
ness needs of the country through bank
ing accommodation. would give elasticity
to credits and an ample supply of cur
rency and there would be no scarcities
or famines in currency thereafter
Mr. Treat said this proposed bank should
COO. 900. and should be allowed to issue
national bank currency and be govern
ment depository and reserve agent for
all banks doing business with 1t. 1t
should have the right to buy and sell
foreign exchange and the privilege of
red scouting the bankable paper Of its
shareholders at a rate of interest not ex-
ceeding per cent, of which % per cent
would be left as a margin as Is now done
by the Clearing House Bank Association
in its loans.
Paper as Security.
AS further expansion privilege, Mr..
Treat said. the Secretary Of the Treasury
should be authorized to receive as col
lateral security the paper discounted by
the National Clearing House Bank, which
would have two indorsers beside the
principal. This, he said. would enable
any bank with a decent line Of assets to
supply itself with adequate currency or
credit needed in the community where 1t
does business.
This clearing house bank would fur
nish a market for the balances of urban
at convenient seasons during the year"
said Mr.. Treat. 1T would also give an
opportunity for the city banks to invest
their money more In commercial paper
and less on the stock exchange This
method would give elasticity to our cred
its as well as an ample supply of cur
rency, and there would be no scarceties
or famines in currency thereafter"
MIR. Treat added that he would not give
the national clearing house bank the
right to establish branch banks. because
the national banks Of small capital have
proved a great success and are well man.
aged and safely conducted. A reason
which he gave for his advocacy Of large
central bank was that it would tend to
make a coordination of influence among
all the national banks. to be guided by
the central head. principally by advice
or example-something which, Mr.. Treat
said, was now absent and was defect
plainly manifested in the recent panic.
Discussing the administrative features
of the national banking law, Mr.. Treat
said he could hardly account for the per-
sistent attacks which have been made
upon the national banking system, and
that he had seen little disposition on the
give it the credit which it richly de-
serves.