Albuquerque evening herald. [volume] (Albuquerque, New Mexico) 1911-1914, 1911-05-02
James B. Forgan Declares That
Evils of Present Monetary
System in the Nation Are
Plain and Remedy Good Ono
STATE BANKS TOO
SHOULD BE PARTIES
Head of Big Institution Tells
Bankers at Nashville That
He Gives Full Approval to
Theory for Association.
~, u,.n,.s ucrn,a \. -. LEASED w,rr,

,Vs t>cWtWs ucrato '. v. tr"-cd Nrr'
nashville. Icnn., May FcN'N
ing the dcfcots of Ga, National Bank
ing t,.-t,ms iu this country and oii'r-
ing what hr personally believes MI
b., remedies to relieve these cnudi-
tiuns Iamcs % Fu'ggu president "l
tn, First National BANK ni thi'ag"
last evening addressed the executive
committee pI ia, american bhnk'ft
ussuciuuon witch is iu session mere
Aft,r reviewing the plan of senator
Nldueh for monetary legislation an"
maktng number of suggestions i"F
the working out of TN, details, MI
FutEpn gave th, plan his h'drN en-
iurscmrut Thc defects ne named IN
th. present system wore
"Firsi IN, defect of our present
s,4t.m To- which I shall refer is ti'
pra,iicul impusiiulits of uniting -"
lnrg, "a number Of banks, oi any con-
siderable portion oi them under
common pnlirt of action. such as
ngsnt und,r. unfaVorahie business
conditions. avert anticipated financial
t,oublo -st,r, in other words. 2"
tn. lack nf cp-nporatiun or cohesive
~, ~ among the units OF the system
second TN, cNtravngnnt ana
Was.tcfnl use uf r.s'rvc money rAuN-
cd hS thc requirement that each BANK
must indy idnally control iis own l'-
lal proportion nf a.
Third The further waste fr"m an
economic standpoint caused hy the
direct ~, OF ~ much legal rcserN"
money IN ordinary business uHhs-
actions oar systrm profid's u"
substitute for legal reserve money
eN,ept government hpud secured bank
notes. which are ~ infioxinlc and as
frrospansiNe n fluctuttlons ~ tu'
commercial demand Tor circulating
medium as legal reserve money "
sell"
AFTER discussing thc status ~ ma
tlnnal banking. hc took up ih" Qurs-
ton Of banks undor state rhr ''f 'ho
said
All tho defects of "a. national ~yS-
tom therefore aY, much I'M evidence
among the state banks aud any ph'n
thut doea not include IA, great ma
iority 80 stat Institutions in i@ ben
.nts vW do less than half "a, good
"a othcrWig, might To accomplish
Tho h.ncncial rc.ults that are cN-
i.c,t,d from 10. plan. practically 'll
IA. hanks pf AuS umpurtHncr. bnth
.tr through u ud 100 qualified 60
meet the nocessnrt requirements
should In some way be- brought into
IA Unless ths &. accomplished con.
Uirnue Interests tlli continue p th'
nenking busino-, which VIII ser-
tni.h Interfere With thc operation
of the plan nud gr atty dctract 'r"m
g. benefits 10 the public
II would u, id "a 60 hpv. the bank
ing business of the rpuntrt al' dom
under ono national system. 80 long
as Wr have forty six states, however.
with tho rgat To- ,utrancnisr th"ir
own hanks. to regulate them under
,hcir oan jurisdiction ana ia MAKE
their own banking laws. " Nill NOT
fear. hc practical 90 bring tho state
institutions or ans considerable num-
hor al them. INTO a national system,
Ou June 3u. 1elb. tnc last date on
which u comparison can hr made,
~" had 1.lib nrti"nal banks and 10
pso state banking institutions, N"
iormor controlled S1,at1, ,ooo,ooo de-
pusits while the latter controlled
Si0,3sl, 600 Oon ThcSo figures dis
close The drhculty Of tn problem
aud demonstrate the fact that again
30 is - condition and not theory
with which we have to grapplr
II has been suggested that thu Ma
tioual BANK act might he lihcralizcd
80 ~ 10 permit the rcipcorpnratior
nf state banking institutions under II
with power to carry on. within some
what more restricted limits, tnoii
pt.,cnt classes 81 business, u does
not seem 10 me that il would be sd
visahlc to attempt 10 50 libcralzc Tho
National Rank act iAai the STATE
banks would b induced To- surrender
their state charters and relncorpnrai,
undct the national law. 10 arrive al
m Intelligent conclusion ~ Ia IN,
probability Of their So rcincorporat'
inp one would have to he familiar
with the forty-six different banklnl
laws under watch they now de- husi'
nos'
Very few of the state laws provide
for fixed legal reserves against dc
posiis sonic OF them mako provisions
for the mutual guaranty of deposits
recent developments IN connoctio,
,Ath which. however. would indi-
cpt, that this provision would drly'
state banks into the national system
rather than keep them ont of It.
u would be necessary. il seems 4
me for the autonomy and compre
hcnsvs ness of the proposed plan thl
the greater part AZ least of the stat
banking institutions should in som'
may become parties 10 A. Tho Ma
tional i'ank act might he lihcralizo'
sn ~ to enable national banks q