The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1909-11-12
Rhode Island Senator lG'iIsTs
Address In Des MOin3s
SYSTEMS ARE COMPARED
Foreign Methods of Banking Are Dis
cussed by Aldrich Who Does Not
Want Them, But an improve
ment Upon Them.

Des Moines, Ia. November 11.--senator
Aldrich tonight before the local Bank
! ers' club discussed the necessity for the
reformation of the banking and currency
laws with the end in view of providing
against panics like that of 1907. and went
into details concerning the operations Of
central banks in Europe This being the
home of Senator Cummins, 1t has been ex-
pected that Mr. Aldrich would make some
reference to that gentleman who had
shown an inclination TO antagonize his
policies, but the only allusion TO Mr. Cum
3, Minis was courteous and being made In
connection with mention of the late SEN
ator Allison, could not have aroused any
but the kindest feeling
Mr.. Aldrich spoke especially of the
growing Importance of the west as afford
ing the best reason why the people of
| Iowa should desire a stable banking sys-
tenn and he appealed to them to join him
in devising a plan that would place the
United States in advance, of all other ma
tions a financial center.
Here he gave somewhat more attention
! than elsewhere to the important part
that commercial paper plays in the bank
Ing systems of the old world This, he
explained, was not done for the purpose OF
urging the adoption of the European plan
| in the United States but to indicate a pos
sible means of increasing credit in case
| 1t should be found desirable to go abroad
for suggestions looking to an improve
ment over our monetary system In the
! course of his discussion of this feature of
foreign banking, Mr. Aldrich said;
I Methods In Germany
! In Germany all notes. taxed or untaxed,
must be covered by an amount of specie
! equal to one-third of the total issue and
/ an amount of bankabe bills equal to the
/ other two-thirds. These bills are what we
! call compercial paper They must bear
the name of two solvent parties and must
not run for more than 30 days to answer
the standard fixed for bankers bills
In f1ance they have a provision that
what are bankable bills there must bear
/ three names and must be written the
| same limit as to time as the German
i bills. In Great Britain the custom is to
require two names of English citizens,
one of whom must be acceptor OF course
you are aware Of the difference in ter
| minology of our commercial paper and
theirs. Our people use promissory notes,
either with a single name or with in
dorsers. No such thing as a promissory
note is known in the ordinary experience
of those countries. They do give a form
of obligation with mortgages and some
| ~
the closest approach to our form of prom
issory note.
There, if a wholesaler sells retailer
goods of any kind, or dealer, wholesale
or retail, sells to a customer any article,
the wholesaler or merchant, whoever he
may be. makes draft on the purchaser
and that draft Is accepted and the paper
is known a bill of exchange. 1t is for
real transaction, and those bills are
bankable and they are the foundation of
the credit system of the countries | have
named"
AIdrich Explains.
Mr.. Aldrich also took occasion to ex-
plain that in referring to foreign systems
lie had no intention of urging the adop-
ton of any of them.
In making this statement to you as to
the character of these banks, | do NOT
want to leave any opportunity for a mis-.
understanding whatever" he added 1T
is not the purpose of the commissioner
certainly is not my purpose-to try TO
make any part of the American people
believe that these systems could be In
troduced here, certainly not without great
notifications. And | am not presenting to
you tonight this matter with a view OF
convincing you. of prejudicing you or
Of xo n in for a Iat
| or any of the members of the commits
sion believe that any of these systems
could be adopted by the United States.
Habits of People.
"The habits of the American people, the
relations which exist between banks and
borrowers. and banks and depositors; the
5000 Independent institutions In the
United States. all related to the develop
ment of various communities must be
considered and no system be adopt
ed in this country that does not recog-
nize the fact that the continuous exist
ence of these banks and the prosperity
of their business must be maintained.
OF course, have great difficulties to
overcome: but we cannot overlook the
conditions / have named and il is not
the purpose of the commission or of any
member of it to ignore it.
IF we have any credit organization at
all. We propose that 1t shall be an organi-
zation which shall be the servant and not
the master of existing banks. | concede
freely that any institution or organiza-
tion which we may adopt must be one
that can be fitted into the existing sys-
tenn, and any changes that are at all rad
zeal In their nature-and | am inclined
to think that. in some respects, shall
have TO make some changes that will be
scientific and radical in their character
must be made with a view of adjusting
them to our existing system"
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