Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1912-09-10
B0NYNGETALkS
ON MONEY
REFORM
COURTS CRITICISMS OF PROPOSED
PLAN OF NATIONAL MONETARY
COMMISSION AND DECLARES DIF-
F|CULTIES TO Be met ARE IN
SlGNICAN1 COMPARED TO THOSE
FOREFATHERS OvERCAME

DetfOlt, MICH, sept. lO,-NOW is tnt
time for criticism of the proposed ma
tional reserve association recommend
ed by the national monetary commits
sion, to come forward and point out
what they believe to be defects in the
plan, in the opinion of Robert w
Bonynge, a member of the commission
who addressed the American Bankers
association in convention here today
Mr. Bonynges address was on Bank
ing and Currency Reform" He spoke
in part as follows:
"Our banking and currency system is
universally recognized as thorolg ghly
unsound All the political parties have
declared in their platforms of this
year in favor of it's reformation, but
no specific remedial legislation has
been proposed by any. 1t is Pc rhaps
better that they should not have done
so. The problem is essentially an
economic and business question.
''The defects in the existing y;tam
that must be remedied no mnltc-
which party is charged with the re-
sponsibility of framing the legislation
are: Our unscientific treatment rf
bank reserves, the rigidity of our en-
tire credit system and the lack of CO.
operation between our independent
banks.
Our present reserve system re-
stricts the loaning power of banks at
times when reserves should be freely
used and credit literally extended to
solvent business men and thereby in
tensifies, if it does not actually pro-
duce panics. Our scattered reserves
are wholly ineffective for use in emer-
gencies. Our bank notes do not fiuc.
tuate in response to business needs.
Even the commercial paper held by
the banks is not truly liquid asset
with us. Each separate bank in times
of stress is concerned only in strength
ening it's reserves. The sole method
available for that purpose is the call
ing of loans. The portion of the re-
serves held in the vaults of our thou
sands of Independent banks is for all
practical purposes dead asset. In
deed, rigidity stamps itself upon our
entire credit organization.
1--WE have only local banks. They
furnish banking facilities to their own
communities. They are indispensable.
But it must be obvious that these
strictly local institutions can not look
after or provide for the general credit |
Of the country at large.
LAS it was found necessary to or
,anize the federal government to guard .
on those subjects affecting us as a
nation, so we must have some national
federation of the banks for national
financial purposes. The independence
If the units must be absolutely pre-
served. The powers given to the fed
Grafton of the banks must be strictly
United to those that are national in
character. The form of organization
must be such as to insure it's operation
n the interests of and as a support to
vi legitimate business and must be
Wholly free from sectional, political or
elfish financial control
"When thus organized it must be
to act as custodian for the
eserves of the banks, to rediscount
heir short time commercial paper, to
rovide a safe and sound bank note
that will automatically adjust
self to the constant changes in bust,
ess requirements, to act as the gov
fiscal agent, and to repre- ,
ent us in all national and all interna-
onal affairs. !
"Experience proves that currency
'sued by a government or by a gov
owned by an institution al ,
'ays lacks the essential element of -,
lasticity. Its amount is determined
y the governments needs and fitted ,,
y statutory provisions which cannot
e speedily altered to meet changing
)nditions. The government issues :.
loney, and may and should in the in :
crest of the public regulate the agen.
or agencies which may, in accord i
nee with certain general principles Il
lat it establishes, issue credit re- n
in lawful money. 1t is for $
lese reasons that the issuance of |.
ank note currency should be intrust- o
l to the federation of banks under t
,gulations to be prescribed by statute
I'D strict government supervision p
trough its own officers. il
with cooperative federation of n
If banks established, having the
Id money stringencies would no Il
ecessary powers to protect our gener-
credit conditions. banking panics |,
n Yala Eaoh indonondonf