Audubon County journal. (Exira, Iowa) 1884-1993, 1911-10-26

RESERVES WHICH are VI UO OHlly UbO
to a bank. because the law says they
cannot be drawn upon.
To hold all government deposits,
and act as fiscal agent OF the govern
ment 1t would accept no deposits
from any individual, firm or corpora.
ton.
Under some equitable agreement to
take over and retire all national bank
note issues and substitute it's own
notes therefor, based on the same
bond and also on it's other assets.
1T should not lend on bonds, but
should give all subscribing banks the
privilege of re-discounting, at same
| rate to all, any good commercial pa
| per having not over % days to run,
thus making liquid the good assets Of
| any and all banks.
1T might also re-discount CONNER
cial paper having more than % days
| and not more than four months to run,
| provided 1t was guaranteed by local
| institution, to one of which all banks
in each district would belong. 1t could
| also do business In foreign exchange
and in various forms OF acceptances,
as might be worked out In detail.
Payments would be made to banks
from their balance in cash or national
reserve notes.
Check for the Dangers.
The danger of an over-expansion
OF credit and notes issued could be
checked by tax beginning when the
ratio OF reserve to all liabilities reach
ed percentage to be fixed by experts,
and increasing as the ratio of reserve
decreased until it arrived at figure
which would be so large as to be Of
fective as final check The brakes
would be put on so gradually that
there would be no sudden jar, which
would scare all the passengers and
break few bones.
This tax would not be on the notes
themselves, but through the raising
OF the discount rate, would fall on tho
banks In proportion to the amounts re.
discounted by each bank and charged
weekly as long as reserve was below
the required amount.
Inc clearing house certificate plan.
or 1ts further development in the Al
orlch-Vreeland act, would undoubtedly
work we'll mechanically, as far as IL
could go, but psychologically it Womb
surely prove failure, because It calls
the attention of every one to the fact
that the regular system has broken
down.
The League will not favor a bill i'm.
properly safeguarded as to the control.
and wishes additional concrete sugges.
tions from any one which will abso-
lute!y prevent such an agency from
getting into the hands of any section
or class, and at the same time keen
1T clear OF political influence.
Wouldn't Injure Smaller Banks.
| AS 10 the injury to the smaller
banks, ! fail to see how such thing
is possible. Now they go to their cor
respondents in the reserve cities for
re-discounts. With a jointly owned
agency to re-discount their paper they
would have one more institution to 60
TO, and that an organization In which
they mad a governing interest, and
where, by provision of the law, all
would have to be treated alike. This
favors actual sales of goods, rather
than speculation on Wall street. or
elsewhere, and also helps the smaller
town because banks in larger centers
are apt to have a much larger proper
ton of bonds and less commercial pa
per than the banks in smaller com
munities.
1T would decentralize control Of
credit and give to each section of the
country Its just proportion of credit
facilities. Nothing else would be al
lowed, since publicity would prevent II.
To my mind, it certainly assists the
country banks more than it does the
metropolitan banks. In that way II
builds up the country town and by pre-
serving the independence of the farm
ers and small merchants helps to Sc
| cure the permanence of the republic.
Times are none too good at present
for the average business man and
many person Is out of Job be-
cause of curtailment in his line. I'm.
der such circumstances 1t does seem
as though the voters, and through
them congress, could be brought to
understand that nothing is so fun
damentally necessary to produce GER
tain and unbroken prosperity as
good banking system. 1t is the foun-
dalton of all credits and all business
and certainly should not be pushed
aside and delayed for other issues
which though very urgent seem to
many less important It should be
acted upon at the next session of con-
gress.
AS l have said in the beginning. to
the business public this subject Is Of
greater Importance than any other
| now before the American people for
consideration. believe our interest
should be aroused in it, not only on
account of the benefits to be derived
from 1t ourselves, but especially on
account of the great good that will be
done to the wage earning element in
our country.
| In times of panic most solvent mer-
chants. bankers or farmers go on with
very little change in their mode of liy-
ing, excepting, perhaps, the cutting
off of few Injuries, but the burden
falls heavily on the working classes,
who are thrown out of employment,
through no fault of their own, and find
they cannot obtain the necessities Of
life. Members of the family become
Ill, they get into debt, and soon find
themselves in difficulties and trouble
from which it takes them years to
emerge.
Personally, believe plan of this
kind will do many times the real good
that the charitable organizations in
the country can do towards relieving
| nP CT