Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1913-11-20


loss to the banker, but also to the
business public.
The banks are required to subscribe
to the federal reserve banks an
amount equal to 20 per cent of their
capital, one-half of which must be
paid in at once, the other one-half be-
ing subject to call, This is to be taken
over and placed under the manage.
ment of, corporation in which the
banks have not only minority rep
resentation, but very limited voice
indeed. In return for the capital thus
appropriated the banks receive GER
t.ficate, which cannot be sold or as
signed over which hone of the usual
rights Of property can be exercised.
The banks are obliged to make this
subscription, or be dissolved. Charters
have ever been regarded In the nature
Of contract, and II Is doubtful If, I'm.
der our constitution, congress can
take away the charter of a bank in
this summary manner, not because the
terms Of the charter have been vio-
lated by the banks, but because the
bank management might refuse to
make coerced investment such as
the pending measure provides.
There are other provisions of the
bill equally important and far reach
ing in their effect.
American Bankers' Resolutions.
The resolutions adopted by the
American Bankers association were
as follows:
Resolved, that the report OF the
currency commission be received and
placed on file.
Resolved, that we approve the
work Of the currency commission, and
that we ratify and endorse the action
of the Chicago conference, the con-
illusions they reached and the recon-
mendations they made.
Resolved, that we urge upon con-
gress the wisdom and necessity of in
cooperating into the proposed law the
amendments recommended by the Chi
cago conference, all of which have
been deliberately presented to the COM
mittee on banking and currency, OF
the United States senate, In which
body the proposed law is now pending.
ANY law passed by congress, in
order to be effective and realize, in
are seeking currency reform, must
command the approval and enlist the
cooperation of the banks Of the coun-
try. both state and national
Resolved, that We commend the
president. the secretary of the treas
ury and congress for their efforts to
give this country an elastic as we'll as
a safe currency, and pledge them our
hearty support toward the enactment
Of proper legislation to that end
The question is asked, why, If the
bankers approved such provisions In
the so-called Aldrich bill, do they OPP
pose similar provisions in the so-called
Glass-Ow bill?" This Is the reason:
{a) Investment In the stock Of the
Central Reserve association created
by the bill of the national monetary
commission was permissive. not COM
pulsory; banks might invest in the
same II they chose, or they might de-
cline the opportunity. in accordance
with the dictates of their business
judgment
(b) Under the terms Of the bill of
the national monetary commission, the
bankers controlled management
of the Central Reserve association. 1t
follows that an Investment in the
stock of the association was an invest
ment under their own control and
management. On the contrary, invest
ment in the stock of the federal re-
serve banks Of the Glass Owen bill Is
compulsory The individual banks have
minority representation in the man
agement of these federal reserve
banks and have no voice whatever in
the selection OF the federal reserve
board, which dominates the federal
reserve banks, and the proposed meas
ure only provides that one Of the
seven members must have banking
experience.
Guarantee Against Political Control.
The fact that the bankers controlled
the Central Reserve association was a
guarantee against political control,
and it was equally guarantee against
incompetent management - two i'm
portant respects wherein the pending
measure is lacking
I believe we will all agree that the
resolutions are temperate in tone and
worthy of consideration.
One section of the bill which is
worthy of commentator probably as
much or more than any other Is the
re discount feature, but that in its
present form will not be Of great serv-
ice to country banks. 1t provides for a
maturity Of 80 days on nearly every
note discounted, with some at 100 days.
The small country bank which loans
mostly to farmers has very little paper
that comes to Anal maturity In 90
days Notes given to buy cattle, for in
stance, run from six to nine months
The ordinary run Of crop notes run
from to ~ months. The above two
classes Of notes form large per cent Of
country banks paper and the bill
should be amended to make them
available for discount. Another thing,
, this e-discount section OF the bill
seems to be relied on in a great meas
ure to insure the success OF the whole
act, from making It possible to trans
fer the great sums Of reserve money
from the present reserve centers to the
relieving OF tight periods OF money It
should be very liberal and very broad
to make it Of service. Rediscounts
made by national banks with the fed
eral reserve bank should not be re-
uured to be printed in the national
bank official statements. Rediscounts
should be made a duty that is credit
and not a censure as now, for you
probably know that the well managed