The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-08-22

cial need for them? Such plan
would be simpler, less cumbersome
and more certain in operation and lar
more efficient. There would then be
no need to give the federal reserve
board authority to direct one section
of the country to lend money to an
, ether.
las matters stand today, when
stringency in the money market ex-
lists, our % 900 banks begin competing
with one another to strengthen their
cash reserves. In doing SO, they in
tensify the stringency and aggravate
the trouble. The disposition of bank
managers to strengthen their individ
ual instition is natural and inevitable.
In viewing the proposed legislation,
one of the most natural questions then
is whether the establishment of these
regional reserve banks will remedy or
aggravate that condition. Will not
there naturally and inevitably be COM
petition among the regional reserve
banks, competition among the IL sec
tiCns of the country and may We not
in the end have competition for cash
holdings, among individual banks added
to the competition of section against
section, reserve bank against reserve
bank
Danger Is Recognized.
The trainers of the measure evident
ly recognize that danger and seek to
palliate it by giving to the federal re-
reserve bank to lend to another. I'm
der these conditions would not the ex-
erciSe of that authority fail to accom-
pliSh the just distribution of funds? Is
there not a strong probability that in
exercising that authority, factors would
be created that would endanger the
smooth working and perInanency of
the whole plan? With a single central
reserve, bank with branches, reserve
money of all the banks deposited with
the central institution would count in
the aggregate, no matter with which
bank it was deposited or through which
branch it was lent.
With such a central bank the con-
trolling board would place its reserves
in the section of the country where
most needed
Mr.. Hepburn pointed out at some
length what he believes to be the dam
ger of having the credit of the gov
eminent called in question at some flu
ture time by obligating it in the pro-
posed note issues of the regional re-
serve banks. The banks he said,
should be made solely responsible for
the notes. 1t was his opinion that
these notes meant initiation, though he
disclaimed any offense by the term.
He pointed out that the limits of the
resources and business of the reserve
banks would lead to a curtailment OF
credit.
lie pointed out the wisdom in pro-
VIding for land loans and savings de-
partments in the system. The alb
sence of public hearings on the bill
ana the imminence of its enactment !
he said, placed a responsibility on the
bankers of the country which they
could not avoid In reviewing the
commendable provisions of the bill,
he said:
at creates a central bank. it es-
tablishes branch banks. it recognizes
bank assets, in the form of CONNER
cial paper as the normal and proper |
basis for bank currency. it provides |
for keeping the current funds of the |
United States in current use instead !
of locking the surplus up in the SUBJ |
treasury whenever the income from |
taxation exceeds government expendi- |
lures. At the present moment We
have an illustration, since the secre- !
tary of the treasury is now putting
back into the channels of trade !
which the excess of taxation |
over expenditures has withdrawn I
from business-an attempt to restore
a normal condition and to offset the !
created by such tax alb |
ton,