The Washington herald., 1913-08-17
CRITICISMS OF.
CURRENCY BILL
Banker Who Attended Recent
Conference Takes Issue on
Number of Points.
-.iARP RISE IN STOCKS
O. IL r1 uI.11 I..u> R>-I.
-.iARP RISE IN STOCKS
Strensth at Close-Will Issue Bonds.
Junior Bankers Will Meet.
Financial News.
BY !. A. FLEMING.

By A. FLEMING.
Just what effect will the enactmen
of the proposed currency bill have oil
the national banks of the nation?
This question is being asked of tn,
leading bankers of the nation very gen
orally by the shareholders and official.
of 100 national banks.
They have read SO much adverse criti
cisa, heard so much argument. pro anC
con, that they are more or less at sea
and undecided.
Not all of the fiscal representatives OF
the West and South who rushed here
on the invitation Of Secretary McAdoc
to obtain dole of government funds al
per cent interest TO be loaned at home
at and per cent, and even 10 pei
cent. hold the same high opinion of the
currency measure that they apparently
did when supplicants for cheap cash.
Here is an interesting letter from the
head of a national bank not a thousand
miles from Washington. giving his views
to an inquiring member of the frater-
nifty. Paragraphs and extracts are given
herewith:
1T is not just to ask the stockhold
ers of a bank to invest their money il
something that cannot pay more than
very moderate rate of return when they
would naturally have to carry suct
great risks.
"I do not believe that it will be prac.
tical TO operate the collection business OF
a national bank, for the reason that the
regional banks with whom we shall be
forced to carry such large amount oi
/ our reserve will not do collection busi-
>acss, and the member banks Will have to
transfer to the regional banks their re-
serve money in cash and keep II there
as such the same as they now do Win
the redemption fund in the Urea surS'
This cash will be thus maintained with
out interest to the owning bank-a
proposition eminently unfair.
Your collections. which have beeI
sent to cities where they have been car,
ried by You as reserve, will be deprived
of that privilege: balances would be re-
duced and advantageous arrangements
Cancelled.
to invest 20 per cent of their capital IN
shares OF their regional bank, on whicn
: per cent is the limitation OF returns.
This TO my mind is not right; there
should be a fair division of earnings be-
tween the regional bank and the member
banks after the - per cent reserve has
been created.
Too Much Centralized Power.
1T is not for the best interest of the
banks. nor yet Tor the public. to have
the circulation privileges OF the per
cent bonds withdrawn. There is no pro-
vision in the DILL to reimburse the banks
for the premiums paid which many banks
are now charging on. L also nave srea
doubts concerning the advisa6iity 81
permitting the proposed Federal reserve
board to fix the rate OF interest TO De
paid. This provision would seem 10 Of
fer an opportunity to squeeze the oanks'
even if il was not used.
The bill should be more explicit ana
broader in the matter of collateral Oh
fered for rediscount, as ii will Ieave too
much to the discretion OF the Federal
reserve board.
Warehouse receipts are certainly good
collateral and bonds that Will reach Il
certain grade or set stancard OF re-
nuirement easily designated. should be
accepted regardless of whether the bond
is a municipal of Texas or Maine, rail-
road or otherwise. An advisory board OF
bankers would certainly not be out OF
place and the fraternity should be gwen
this consideration. The practical side 81
the matter could be much more eN-
peditiously and satisfactorily decided and
worked by such u board of experts.
An Easier Way.
Having given more or less sage advice
in this matter, the banker then assumes
that this legislation is not badly needed
at this time. In this many bankers
agree but others and a majority are OF
the opinion that legislation is needed.
But the banker quoted has yet another
idea:
banking act. with a modified Aldrich-
Vreeland plan added. and the construc-
rion placed upon the powers OF the sec
retary of the Treasury bv Mr.. McAdo9
IN Ioaning on commercial paper. Wouid
meet all the requirements, but / would
suggest that emergency notes instead OF
actual Treasury money be issued AT Il
rate Of interest to force the banks TO
loans QUICKLY as pos
sible. a plan of something or this klnu
would certainly give is emergency cur
rency. the main thing he administra
could still have the same control OF the
hanks and examine them even oftener
than FIVE times a year. if so desired.
yunior Banker. to Meet.
A month hence the American Institute
Of Ranking, the junior members of the
profession, will hold its annual conven-
ton in Richmond There will be an at
tendance of 500 or more, and, en- route
over 100. of these future financiers' VIII
he entertained in Washington by their
fellow-members.
II will be a case of entertainment from
start to finish IN Washington. Down the
river to Mount Vernon, an outing at
Marshall Hall, automobile tours around
the District, a luncheon. and other ell
tertainment will fill the day.
The serious work of the convention
begins in Richmond September IL. The
session will continue until the 2Wh' IN
elusive. Gov. Mann of Virginia will well
come the delegates to Richmond. On
the 18th Senator Burton of Ohio VIII ad-
dress the Young bankers, and other
celebrities rot named as yet are Oh the
list of speakers.
Fred Ellsworth, secretary OF the insti-
iute will lead the discussion of the SUBJ
ject, Bank Advertising and Business
Building Much interest il taken in this
debate and results are expected when
the suggestions developed are put into
practice.
Their Functions" has been assigned to
clearing house section of the nssocia-
ton, as the leader of discussion.
The climax of the session will be a de-
bate between Pittsburgh and Chicago
members. Several debaters have been
named from each city. Subject: Re
solved, That So-Called Blue Sky Leg
islation Would Be for the Best Interests
Of the People of the United States"
Washington juniors will attend the con-
vention in force, every one planning to
spend at least one day there.
Any Governments.
Some bankers have written to Wash
ington correspondents requesting infer
nation as to whether It would be neces-
sary to deposit 2 per cent bonds with the
Treasury in part security for government
deposits which Secretary McAdoo % now
making in certain banks.
The Treasurer's ruling Is that 10 per
>ant of the security offered shall be Qov.