Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-06-01
Ohio Senator Says Regional
Reserve Democrats Urge
Would Be Inadequate.
SPEAKS TO ASSOCIATION
OF STATE CREDIT MEN
Says Compulsory Guarantee of De-
posts Would Be Tax on Well
Managed Institutions.

YOUNGSTOWN Ohio, May Ex-senator
! Burton, q member of the national none
tary commission, in an address tonight
| to the Youngstown Association of Credit
Men, came to the defense of the central
reserve association proposed by the COM
mission in it's plan for financial reform,
and criticised as inadequate the regional
reserve associations favored by demo-
Gratis in Congress.
Senator Burton declared that all the
benefits that might lie in the regional
serve plan could be found in the central
reserve as well. and insisted that only
through some such central authoritative
agency could stability be insured in times
of financial storm.
The regional plan, operated with five
associations, he said. probably would
prove vastly superior to present cond tons,
but If twenty-five or even fifteen asso-
Citations were created he doubted if any
benefit would enSue.
Not Truly National
The objections to the regional plans
are. in the first place. tina. II is not
truly national" said the senator. All
our banking business, like transportation
and many other commercial and indus
coming national. and this applies with
special emphasis 10 the utilization of
banking reserves. Separate and unre-
lated organizations would seek to main
tain their own credit and supply their
own Customers without regard to the
needs Of others. There would be no
effective unity Of action in facing
financial storm.
1T has we'll been said that the most
serious feature of every American finan-
cial panic has been the jealous and d s.
graceful struggle of the different locali-
ties to fortify themselves at the expense
of one another. instead of working in
harmony. as they would under one cen
trail institution. There would be con-
slant repulsion Instead of uniform rates
Of interest which might be secured under
the plan Of one association, the wide
differences in rates which now prevail
IN different portions of the country must
still continue.
''All the advantages which can be OBJ
tanned from the separation into different
regional associations can be as ade-
quately and far more fully secured by
the esta bishment Of branches Of one CEN
trail institution
Resort to Banking Resources.
Under the regional plan. in case any
one bank should be in trouble. it could
have ready resort to the banking re-
sources of but fraction Of the country;
III under central dSSOcldllOI pan ~
would have the immediate support and
backing Of all the banks of the country
In times Of slackness when bank
has a surplus to invest, under the central
association plan it could seek the very
widest field for investment. a field which,
under the regional plan, would be very
much limit ed The two great objects-an
adequate and elastic currency and the
proper utilization of reserves-can be
best obtained by a central association.
Attacks Compulsory Guarantee.
Senator Burton attacked the proposal
for the compulsory guarantee of bank
deposits as "a tax upon we'll managed
institutions for the delinquencies of bad
Judgment, imprudence or dishonesty In
the conduct Of other institutions, for
which they were in no way responsible,
and whose errors they would have no
power in preventing.
He replied to the argument that under
the monetary commission plan money
would flow to the great centers OF trade, !
by declaring that such now could no
more be controlled than could the tide of
populate or the waters of a river. and
that money would naturally seek places |
where 1t was in demand. no matter what
restrictions were attempted. Control OF
deposits so that they cannot be diverted |
to speculative uses, he said. was neces- |
sary and feasible.