The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1913-08-07
c. G. DAWES REVIEWS
THE CURRENCY BILL
Ex-cOMPTRoLlER OF THE CUR
RENcY IS FEARFUL OF FEDE.
RAJ COMPETITION.


Among the various criticisms of tn
Owen Glass currency bill none is like
~ to attract more attention than tina
OF Charles G. Dawes, ex-Comptrolle
or the currency made public recently
says a Chicago dispatch. As a practic
al banker, once prominent In publ
life, Mr.. Dawes has a large following
particularly In the Middle West il
his carefully prepared review of tn
Administration bill he says:
The Administration currency bill /!
practically a bill for the organization
OF number of large central banks o
great power, to be tablished In com.
petition with the present system o
independent banks Of the country. A,
distinguished from the Aldrich bill 1t Is
departure from the present indie
pendent banking system of the United
States and not a development of 1t
1t tends to destroy and lessen the i'm.
portance Of the present system of in
dependent, competing banks.
while it is SO constructed as to APP
pear less radical in its grant Of CEN
tralized power than the Aldrich bill
1t Is, In fact, much more radical In It's
grants of such power Let us analy&e
1t:
First. This bill proposes to compel
the national banks to furnish the
capital for a number Of Federal re-
serve banks under the ultimate control
of Government appointees, which re-
serve banks become competitors Of the
national banks and State banks
%. Besides their capital it compels
the National Banks to turn over to
these competitors several hundred
millions of reserve deposits--in other
words TO contribute to them both
capital and business. As the Federal
Reserve Banks pay no interest on
these forced reserve deposits, they will
be no mean competitors.
g. No limit is put to the extent of
loss which the National Banks may
suffer on their investment in Federal
Reserve Bank stock, but they are
limited to a per cent return.
"A. The government, which has re-
eeived par for its per cent bonds,
deposited by the National Banks TO
secure their circulation, If this law is
passed threatens with loss any Ma
uonal Bank which outstanding circu-
lation and desires to retire from the
system, The real reason why no ade-
quate protection against the fall in
price of the 2's, due to the withdraw
of the currency privilege, is given to
outside holders Of them, seems to be
to make it extensive for National
Banks, having a large circulation to
Join the exodus from the national sys-
tenn which will occur if this bill
passes into law in its present form.
%, The above proposition concerns
greatly the welfare of the public. as
well as the banks for the reason that
they, with no other provision of the
Bill, tend to make it Improbable for |
banks to do business under the ma
-1onal laws as compared with state
avs.
"6. Statutory laws heretofore, when |
hey defled the underlying laws of ,
have proved failures. By |
irving into State systems large. II
lot the greater, part of the national
banking system, this law. instead Of /
'nifying our banking system, would
end to scatter 1t under diverse State
avs, greatly differing in their method
f regulation
Y. In normal times. the stockhold-
ng banks which own but do not con-
rol the Federal Reserve Banks will |,
ave no occasion to use the Federal
reserve Bank currency. An enforced !;
artial liquidation of credits is now
! progress. When it is over there will
G large accumulation of the idle
nd unloadable funds in our banks. !
:, as in the Aldrich bill. vacuum
the circulation was to be created ]
y the almost immediate retirement of {
lie $500, oo0,0 900 bondsecured national t
ank note circulation. the banks of t
le country would have need of the re- c
accounting privilege with the Federal I
eserve Banks to secure currency I
seded by the country. But the grad {
II pc cernt per annum retirement /
the bond-secured circulation pro- t