The Fairmont West Virginian. (Fairmont, W. Va.) 1904-1914, 1913-10-04

t,IGdlcSI SdLGIS anu PIVhISG VI uISl
est reward. However, the new ad-
ministration proposed to make
friends with the south and west by
supplying their needs without pay
ing toll to the money changers of the
east aud at the same time clinch sup.
port for legislative measure the
prime object Of which is to deeen-
tralize New York as a money power.
So far the experiment does not
seem to be turning out we'll, IL we
may Judge from the fact that less
than one-half of the proposed amount
OF government deposits has been
placed with country banks. One rea-
son is that country banks do not own
nor control the kind Of security re-
Guired, and another is that the con-
ditions surrounding public deposits
render the latter less profitable than
formerly. Banks which have re-
cGived government deposits are not
saying much for or against the pend
ing currency bill. The OK does not
low over its fodder. But ii Washing
ton advices are TO be depended upon
the capital is thronged with country
bankers protesting against passage
OF the banking bill in ITS present
form.
Ono Of the provisions Of the bill 10
the compulsory contribution OF -
pcr cent. of the paid up and unim-
raircd capital Of each national bank
in the United States. The penalty
for non subScriptiOn to provide cap
ital for the new federal reserve banks
! is the forfeiture Of national bank
charters. The aggregate capital OF
all the national banks is, in round
numbers, $1.O5G,OOO, 900. Twenty
pcr cent. on that sum would be SILL
200, 900. New York city's propor-
ton would be only $2",94O,OOO,
whereas the proportion of the banks
of the southern states would be $S4,-
ZOO, 900, while the proportion OF the
mi1wCstcrn and western states
would be more than $70,OOO,OOO.
Thus the inland national banks, and
not those OF the metropolis, would
be called upon to furnish the work.
ing capital Of the Glass'Owen bank.
Another section Of the bill pro-
vidcs that reserves required to be
held against deposits must be placed
with the federal reserve banks abSo-
lutely without interest. or else kept
idle In the vault Of the individual
bank. At the present time the 7,iSS
national banks in the country ave
s779, 5000 due from approved re-
serve agents. 1t is safe calcula-
ton to estimate that these reserves
arc now earning 2 per cent. or say
$15,4OO, 900 pcrannum. That Is one
item of loss which falls exclusively
upon the country banks, because the
banks of the three central reserve
cities do not carry this item among
their resources. Then there is an
other provision in the pending act
which relates to the collection of
checks. Under the present system
many country banks make a charge
FOR this service, and it is perfectly
Legitimate. This source of profit Is
eliminated In the new bill. Still an
ether section virtually limits TO 5
per cent per annum the dividend that
may be paid, If earned, upon the cap
ital which the national banks are
forced to contribute, and when the
new system is declared operative its
management is given over to an au'
tocratic federal reserve board, the
members of which arc appointive and
essentially partisans Of the party In
power.
There are other provisions Of the
bill which, in the
Judgment OF some authorities, vio-
late fundamental principles relating
TO currency. At the moment these
provisions are not attracting so much
general attention as those relating TO
probable profits or possible absence
of profits under the new system. Mr..
Bryan told Il recent bankers gather
ing at Richmond that banks were
established for the people; that COM
mercc did not exist for the benefit
Of banks. This Is characteristic Of
the baldcrdash dealt in by this talk
cr for revenue only. Capital. like
labor, is worthy of its hire, and any
enterprise that involves the use OF
private capital must take into ac-
count the rewards it is willing to
offer to induce the cooperation Of
capital. 1t is no wonder that the
country banker, upon whom falls the
Glicf burden, has not been tempted
hy the temporary deposit of govern
mcnt funds into support Of measure
that threatens permanent loss II he
remains In the national banking
business.