The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-03-07
TOpekans Endorse AIdrich
Monetary System at Meeting.
e. s. Is Called Financial Nuis-
ance, Speaker Declares.
BONYNGE TELLS OF WORK
Explains How Panics Are to
Become Impossible.
Three Great Defects Found in
Present Method.

| IN a 1OrceIul ADDRESS on Monetary
Reform before more than 100 bust
ness men of the city R. w. Bonynge,
an ex-congressman from Colorado and
a member of the national monetary
commission, explained the defects of
! the present currency system in this
country and told in detail of the Aid
rich monetary plan which was framed
/ by the monetary commission after
thorough and scientific investigation of
the banking system of all the great
commercial nations of the world.
This new system, if adopted, in his
opinion, will make panics a thing of the
past, and foreign nations will cease to
call this country q financial NUS
ance"
Panic Shows Up System.
THE panic of 1907 brought to the at
tention of the American people in a
most forcible manner the fact that our
banking system is thoroughly antigua
ted and so faulty constructed as to
be wholly incapable of supporting the
rapidly expanding business of the
country" said the speaker. 1.-The ma
tional banking system substantially as
it exists today originated out of the
exigencies of the civil war period 1t
fas served several very useful purposes.
1t gave US a uniform and perfectly
country, surerseding the state bank
issues, and has furnished US with
| ready market for our national bonds
at the lowest rate Of interest that any
nation of the world has been able to
| float its national debt.
Those advantages for a long time
Cvershadowed the defects of the sys-
tenn which had frequently been poin led
out by financial experts. But the prac-
tical collapse of the system in 1907, with
all the attendant evils and incalcula Die
losses resulting therefrom, made IT evil
dent to the business men, as we'll as
to the bankers, that The revision of our
banking and currency laws could no
longer be delayed.
AT that time it was found practical
ly impossible to secure any general
unanimity OF opinion either as to the
defects in our existing system or the
proper method to be employed for their
correction.
"A movement was launched to
adopt temporary reform. This was
enacted in the session of congress that
convened in December 1907, and be-
came known as the Aldrich emer-
gency currency law. That bill prOVid-
ed also for the establishment of a ma
tional monetary commission, COM
posed of nine senators and an equal
number of congressman, for the pur-
pose of carrying on a thorough inves-
tigation and devising some plan by
than the present one, could be provid-
ed. A Subcommittee also was formed
to obtain the views of representative
citizens in various parts of the coun-
try. After this was done the commits
sion met last October and continued
meeting each day until January of
this year when a unanimous report
was filed with congress-.
League to Discuss New Plan.
1.-The national Citizens league has
IF
viting and securing the widest possible
discussion of all phases of our bank
ing problems before any bill is passed
in order to be certain when action is
had we shall have the best possible
system that can be devised for the
needs of every section of the country.
I'm the report of the commission
some seventeen defects in our bank
ing system were enumerated. L Will
refer to the three principal defects
which are fundamental and include
the others. They are: First, the scat
tering of the banking reserves of the
country among the many thousand in
dependent banking units and their
consequent weakening for effective
use in emergencies; second, the alb
sence of any legal method by which
the banks of the country can cooper
ate for their mutual protection or for
the stability of the general credit con-
ditions of the country; and, third. the
non-electricity OF our oono-secureu
DdIh-IOlo
1--WE propose to group the existing
national and state banks and trust
companies INTO local associations or
ten or more banks. which shall have
an average capitalization of five mill |
lion dollars. These local organizations
would represent in the plan what
counties do in the political organiza-
ton. The local associations shall be
grouped into Is district associations. |
scattered geographically over the en- |
tire country, and these, district asso- |
Citations shall comprise the national |
reserve association.
ANY Bank Can Buy Stock.
ANY bank of a recognized standard
NAV become a member of the National
Reserve association by subscribing !
pro rata of its capital stock.
There shall be no stockholders but
banking institutions. The stock shall |
be absolutely nontransferable. The |
purpose of this is to prevent individ- |
uals from gaining control of the none |
tary system and to keep Wall street |
from eXerting an octopus influence.
This will be further avoided by a care |
full plan of representation.
The powers of the National Reserve |
association were outlined briefly I'M !
der four main heads. They are, he |
said: To act as fiscal agent for the |
national government; to act as COM |
mon custodian for the reserves of
banks of the union; the right to dis !
count from individual banks the COM |
paper they hold at a certain
time before maturity. but to make no /
loans: to issue notes of the Reserve
association. based upon the lawful |
money reserve of so per cent. When
that reserve fails to levy tax to in
crease it to replace the present ma
tional bank note currency.
Plan Endorsed at Meeting.
Dr. F. s. Blaney and G. A Rogers.
both of Abilene, who are members of |
the Kansas Citizens league, made a
few remarks. A resolution drawn up