Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1911-10-17

esd reserves Of he subscribing banks
-feserves which are Of no daily use
- ! bank. because the law Days th1g
cannot be drawn upon
TO hold al government deposits.
and act q Ascal agent Of the govern
menG II would accept no deposits
Prom any individual Arm q corpora.
rUndsr some equitable agreement to
~ oyer and retire III national bank
NOE issues and substitute it, own
notes therefor, based on the same
bond and also On IL other assets.
1T should not lend on bonde. but
should give IN subscribing banks the
privilege Of re-Aiscounting, 1t same
rate to all, any good commercial pa-
lAf having not Oyer Is days to run.
thus making LIQUID the good assets Of
any and all banks.
1t might also Ee-discount CONNER.
cial paper having more than e days
and not more than four months to run.
provided 1t was guaranteed BY 3 local
anstitution, 70 oa0 q which an banks
20 each district would belong. It could
Also do business In foreign exchange
and IN various forms Of acceptances.
- might be worked out In detail.
Payments would b made to banks
from their balance IN cash or national
reserve notes.
Check fer 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 a liabilities reach.
Cd percentage to be Axsd by experts,
and Increasing as the ratio Of reserve
decreased until 1t arrived at . figure
which would be 30 large as to be Of
fecttve as final check. The brakes
would be put on 20 gradually that
there would Be no sudden jar, which
would scare all the passengers and
break few bones.
This tax would not be on tho 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 AZ reserve was below
the required amount.
The clearing house certificate plan,
or It's further development In the Al
drich-Vreeland act. would undoubtedly
work we'll mechanically, as far as II
could 90, but psychologically It would
surely prove failure. because 1t 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 ~ to the control,
and wishes additional concrete sugges.
lions 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 thing
Is possible. Now they. 60 to their cor
respondents tn the reserve cities for
re-discounts. With 4 Jointly owned
agency to re-discount their paper they
would have one more institution to go
to, and that an organization In which
they had 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 much larger proper
ton of bonds and less commercial pa.
per than the banks in smaller com
munfties.
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 It,
To my mind. 1t certainly assists the
country banks more than It does the
metropolitan banks. In that way It
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 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
6pou UuHAiA6 StCH. ~ 10 thC iooh0
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. It 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 l 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 60 on with
very little change In their mode Of liv-
ing. excepting, perhaps, the cutting
on OF a 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
III, they get into debt and soon find
themselves in difficulties and trouble