Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1911-10-25

IN OJON L L I1EhIAL1Js LAM,
rash reserves of the subscribing banks
reserves which are of no daily use
to bank, because the law says they
cannot be drawn upon.
10 hold all government deposits,
and act as a 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
pond and also on its 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
clal paper having more than % days
ana 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. It 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
or credit and notes issued could be
checked by tax beginning when the
ratio or reserve to all liabilities reach.
ed percentage to be fixed by experts,
ana increasing as the ratio of reserve
decreased until it arrived at a figure
Whlch would be SO large as to be eff
Tectlve 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 rot be on the notes
themselves, but through the raising
or the discount rate, would fall on the
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 It's further development in the AL
drlch-Vreeland act, would undoubtedly
work we'll mechanically, as far as It
could go, but psychologicaIly it would
surely prove failure, because 1t calls
the attention of every one to the fact
tnat 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.
tlons from any one which will abso-
lutely prevent such an agency from
getting into the hands of any section
or class, and at the same time keep
1t clear of political influence.
Wouldn't Injure Smaller Banks.
"As to the injury to the smaller
banks, fail to see how such a thing
is possible. Now they go to their cor.
respondents in the reserve cities for
re-dlscounts. With Jointly owned
agency to re-discount their paper thev
would have one more institution to go
to, and that an organization in which
they had 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
''It 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 it
To my mind. it certainly assists the
country banks more than it does the
metropolitan banks La that way it
builds up the country town and by pre-
serving the independence of the farm
ers and small merchants helps to se-
cure the permanence Of the republic
Times are none too good at present
for the average business man and
many a person is out of a job be-
cause of curtain ent in his line I'm
der such circumstances it 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 a
good banking system. 1t is the foun-
datiOn 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 1t should be
acted upon at the next session of con-
gress.
AS | 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 it 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 liv-
ing, excepting, perhaps, the cutting
off of few Injuries, but the burden
falls. heavily on the working classes,
who are thrown out of employment,