The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1913-10-08
IMPOSES UNwlSE HARDSnIPS
Public as Well as Banks Are Ser
iously Concerned
MEANS POLITICAL DOMINATION

Boston. oct. S.--The currency com
mission of the American Bankers a..
aociation, reporting today to the as
Sociation in convention here. asserted
! that t. favored the old national mon
etary commission bill and opposed the
! currency measure now before Con-
sress for the following prime reasons:
/ Because under the old plan invest
! inent by bankers in the stock of the
! central Reserve association was cleo
live, not compulsory. whereas, under
the proposed bin bankers must sub
/ scribe one-fifth of their capital stool;
/ 10 the federal reserve banks or go out
J Of business.
Because under the old plan money
! invested in the stock of the Central
! Reserve association was under the
| control ot the banks investing, where
as, under the proposed bill the federal
reserve board, dominating the reserve
! banks. was without the bankers con.
troll
Because such control by bankers
denied them in the proposed bill--was
a guarantee against political domina-
lion and incompetent management,
two important respects wherein the
pending measure is lacking"
The report of the commission is
signed by \ Rarton Hepburn, chair
man of the Chase National bank or
New York. as chairman of the com.
mission, James Il. Forgan. president
Of the First National bank of ChiCa-
GO vice chairman. and the following
members of the commission:
Festus j. Wade. president Mercantile
Trust company, St Louis Joseph r.
Talbert, vice president National City
bank, New York; George NJ. Reynolds.
president Continental & Commercial
bank. Chicago; John Perrin. Of Per-
rim, Drake & Riley, lnc.. Los Angeles,
Cal; Luther Drake. president Mer-
chants National bank. Omaha: Sol
MaXler, vice president Whitney Cen
tral National bank, New Orleans; Rob-
ert Wardrop, president Peoples Ma
tional bank, Pittsburgh; f. T. Swim
ney. president First National bank,
Kansas City, Mo-; Joseph \. McCord
vice president Third National bank,
Atlanta; J. +. Sartori. president Sc
curity Trust and Savings bank, Los
Angeles; Levi l.. Rue president Phil
adelphia National bank, Philadelphia:
f.. l.. Howe. vice president Princeton
bank, Princeton, y. j.
Imposes Unwise Hardships,
In part. the report reads as follows:
The hill in it's present form i'm
poses unwise hardships upon the
banks. and equally unwise hardships
upon the general public. The inter-
ests OF the bankers and commercial
public are coincident; the injury can
be inflicted upon the one without the
other also suffering. When business
is active and prosperous. the bankers
share in the benefit when 1t is Ian
gushing, he feels the III effects The
chief function of the banker is to loan
his capital and other resources To his
customers so that they may increase
the activity and extent Of their husi
ness. ANY withdrawal of the banks
capital from these legitimate chan
ncls of trade not only entails a loss To
the banker, hut also to the business
public
The banks are required to subscribe
10 the federal reserve banks an
amount equal 10 20 per cent of their
capital. one-half OF which must he
paid in at once. the other half being
subject To call. This is To be taken
over and placed under the manage
ment of a corporation in which tha
banks have no' only minority rep-
resentation, hut a very limited voice
indeed. In return for the capital thus
appropriated the banks receive a GER
tificate. which cannot he sold. assign
cd or hypothecated, over which none
of the usual rights Of property can be
exercised. The banks are obliged TO
make ;his subscription, or he dissolv
ed. Charters have ever been regarded
in the nature of contract. and 1t is
douhtfrl If, under our constitution
Congress can take away the charter
Of a bank in this summary manner
not because the terms Of the charter
have been violated by the banks. hut
because the bank management might
refuse TO make a coerced investment
such as the pending measure provides
Cannot Recover Capita Easily.
There is no provision whereby a
bank which subscribes money to the
capital Of the federal reserve bank can
recover the same. except by liquida-
tions. either voluntary or enforced \