Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1912-12-02
URGES UNIFORM
LAW FOR BANKS
Congressman Fowler
Would Have Clearing House
System in Nation.

WASHINGTON. Dec. 2.-Former
CONGRESSMAN Charles N. Fowler to-
dav made a statement explanatory OF
the financial and banking bill to be
introduced in Congress today at his
request. His remarks in part follow
sFrom February 25, 1853, down TO
today there has not been a single
amendment to the national bank act
worth mentioning. Today the bank
ing power sof the world is approx
matelv $4,000, 900, 900, of which our
part is SIS. 600, 600, 900. or more than As
per emf Our banking have
Increased during the four years pre-
4 ceding July IA, 1912, by S5,40S, 100000
1--WE now have more tina 2o,OO0
ing institutions in the United states
9 with resources a~ggregating more thar
s25, 900, O00, 200. Our very prosperity at
the present time is u greatest peril.
Indeed, as our prosperity comes on
apace, with equal certainty are we
moving onward toward q commercial
cataclysm,
There are L292 stock savings
banks. with $40 100000 of capital.
4 owing individual deposits of SS42,0O0,-
coo. There are 1881 State banks,
with s459, 900, 200 OF capital, owing indi-
vidual deposits of 81. s12 100000. with
4 s250,O00, 900 additional liabilities. There
4 are LAO loan and trust companies.
owing Individual deposits of $S42, 000,-
with S419. 100000 capital, owing indi-
yidual deposits of 1854, 900, 900, with
$3.50, 000, goo additional liabilities. These
do not include 1901 private banks re-
porting to the comptroller OF the cur
rency. nor the mutual savings banks,
4 which bring the total number up to
II, s04 and the individual deposits up
& to S1I, 1885, 0O, 900.
Banking in the United States con-
4 sists: First, of a commercial busi-
4 ness; that is. a business in the pro-
i duction and distribution of consum-
s able commodities; second, of the saw
/ ings bank business where deposits
should move naturally and automat-
icallv into investments, bonds and
real estate loans, at least very large
ly. third, of the trust company busl-
ness which is now being carried on
in every nook and corner of the
+ country by Institutions having $500
capital. or $40. o0O. 900. rs the case may
he. and. covers every kind of trust
4 from large estates and railway mort
cages to agencies of every sort;
fourth. of the note-issuing business,
which is nothing but another form
of. the commercial business, expressed
IN deposits subject to check.
This is true because a bank note
does no differ in any way from a
deposit subject to check except that
a note passes without Endorsement,
while a check requires an indorse-
|ment.
"The reform is this:
sFirst-Authorize and empower the
national banks to do in addition to a
Monumental business a savings bank
business, regularly and directly, not
Indirectly, nor irregularly, as they
are now doing, and so bring all of
their business under national super
vision instead of compelling them to
do a dotAale-headed business of which
q part is left under State supervision,
or probably no supervision.
Observation-Disclosures and empower
the national banks to do a trust COM
pany business directly and regularly,
instead of indirectly and irregularly
through some other corporation that
they control by holding the stock of
such other corporation in their treas
ury. while the trust company is under
some State supervision, or no SUPER
vision whatever.
"Third-Allow the national banks
to adopt the Canadian bank note
system. and end by the simplest pro-
cess currency stringency and so-called
money panics; you near nothing of
this sort in Canada. This can be
done by simply erasing that baroaric
superscription now found upon the
upper left-hand corner of our present
bank note, which reads as follows:
This note is secured by government
bonds or other securities
.'These things being done, we will
then have a consistent. perfected bank
unit in the United States doing all
the business of the modern bank in
a direct and regular way.
.'The individual, independent bank
should have its parts c~oordinated,
unified and brought into a system.
under one common supervision
and control. That supervision should
not be political, but should be i SUI
pervision of the banks by the banks
in the interest of the people and
banks themselves.
''There is no law in any State au-
thorizing the organization OF the
clearinghouse, and yet there are over
ESQ of them in. the United States.
There is no law authorizing any
clearing-house committee to examine
the banks composing it, ut in twenty
cities at least the clearinghouse
are not only examining their own
members but go even further than
that and insist that no bank shall
clear through any clearinghouse
hank. which does not submit to an