Bisbee daily review., 1912-02-27

The National Monetary commis. sion, in its report to coAgress. sum- marizes the defects ia the present banking system as follows:
 | We have no provision for the | concentration Of the cash reserves of the hanks and for their mobiliza. tion and use wherever needed in times Of trouble. Experience has shown that the scattered cash re. serves Of our banks are useless for purposes Of assistance or defense al such times
 2 Antiqrated federal and state laws prohibit the use of bank re- serves and restrict the Tending pow CT Of banks al times when. iit the Y, presence of unusual demands. re- serves should be freely used and credit literally extended to all de serving customers.
 .. Our banks also lack adequate means available for use at any time 10 replenish their reserves or in crease their loaning powers when necessary to meet normal or unus. ual demands.
 4. Of our various forms of cur, rency the bank-note issue is the only one which We might expect 10 respond to the changing needs cf business by automatic expansion and contraction, but this issue is de prived of all such qualities by the provisions of existing law which make it's volume entirely odependent upon the amount of Unitst States bonds deposited with the tlPasury.
 No Cooperation. b.
 5. We lack means to insure surh effective cooperation on the part of banks as is necessary to protect their own and the public interests in times Of stress or crisis There is no cooperation of any kind among banks outside the clearing house cities. While clearing house organi-' zations of banks have been able tor render valuable services within al limited sphere for local communit- ies the lack of means to secure their cooperation or utilization in broader fields makes it impossible to use these or similar local asen- cies t0 prevent panics or avert cal amitOus disturbances affecting the country at large. These organiza. tions have, in fact, never been able 10 prevent the suspension of credit institutions in their own localities in cases of emergency.
 6. We have no effective agency covering the entire country which affords necessary facilities for max. ing domestic exchanges between. diff , ferent localities and sections, or which can prevent disastrous dis ] ruption of all such exchanges . in . times of serious trouble
 T. We have no instrumentality i that can deal effectively with the broad questions which, from an in- ternational standpoint, affect the credit and status of the United States as one of the great financial powers of the world. in times Oi threatened trouble or of actual panic 7 these questions, which involve the course Of foreign exchange and the international movements of gold. are even more important 10 us from national than from an internation- | al standpoint
 8. The lack Of commercial paper | or an estaDlSncu slduudTQs issued . for agricultural, industrial and com mercial purposes, available for in ! vestments by banks. leads to an ! unhealthy congestion Of loanable ! funds in great centers and hinders ] the development of the productive forces of. the country.
 Eiscount Market Narrow
 g. The narrow character Of our discount market, with it's limited range Of safe and profitable invest. ments for banks, results in sending the surplus money of all sections, in excess of reserves and local de mands. to New York, where it is usually Ioa,ed out on call on Stock Exchange securities, tending 10 pro mote dangerous speculation and n