The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1914-06-11
new BANKING ACT
BOON TO THE STATE
DECLARES BRANS0h
Mitchell Banker Deliv-
ers Address to Bank
ers Meeting.
TO AID BUSINESS
TO AID BUSINESS
New Elasticity for Currency
Will Respond to Needs Of
i Commercial Concerns.

the Federal Reserve Act" delivered
here this afternoon before Group II
of the South Dakota Bankers asso-
ciaton, o. l.. Branson of Mitchell, S.
D., sounded an exceedingly optimistic
note in his predictions of the benefits
that will be derived by South Dakota
from the new banking and currency
act. While declaring it would enable
the banks better to handle the needs
of legitimate business, Mr.. Branson'
issued a warning against o~ver-specul-
alton as a result of the greater avail
ability of funds.
Mr.. Branson's address is one of
foul delivered at this meeting of the
bankers. c.. F. McGrew, president of
the Live Stock National Bank of
South Omaha spoke on Securities;
A. V. Gardner, editor of the North
western National Bank Review, on
minneapolis as a Location for a
REGIONAL Bank; and E. r. Quincy,
vice-president of the First National
Bank of Fremont, Neb., on "Liqui-
dation."
This evening a banquet will be CIV
en- the visitors, to be presided over
by T. C. Burns of Mitchell, who thus
renews his friendship made while an
official of the land office here. Speak
ers after the banquet include E. b.
Townsend of Murdo, E. V. Young
quist of Carter, p. j. Donahue of,
Bonesteel, Ernest A. Jackson of Dali
las and j. r. Cash of Bonesteel.
Law Outgrowth OF Panic.
In his address on the Federal Re-
serve Bank" Mr.. Bransolr said in
part:
"Out of the panic of 1907 grew the
agitation for currency reform, which
has given us our new national reserve
act which is offered as an apology to
the American people for the position
our government took in that panic,
when assistant t~reasurers of the
United States were given orders to
withdraw from the clearing houses
n demand currency for all balances
due the government, demonstrating
clearly that under the old law we
had one of the weakest banking sys-
tens in the world and when put to it's
first crucial test is absolutely fall
ed to respond to the needs of the
people. The new law is intended to
correct many defects that existed un-
der the National Banking Act. In
the first place, it takes the source of
Il money supply away from any one
city, and scatters u currency supply
over the United States where most
needed. 1t will be distributed through
Federal Reserve Banks controlled by
the government, the principal bust
ness of such banks being to assist
the Member Banks in financing the
legitimate business interests of the
contry. In other words the govern
ment is loaning it's capital to the peo-
pie through these Federal Reserve
Banks.
Confers Elasticity.
1.-The new law gives us an elasticity
to our currency which was not pro-
vided for in the old law, and because
of this failure to provide for such an
elasticity, many worthy enterprises
have suffered because of their in
ability to secure ASSISTANCE at the
prarer time. Who will doubt that the
panic of 1907 might have been avert
cd il banks could have exchanged q
rart Of their securities for currency
and send it out into the channels of
t1ude, and who will doubt that, any
panic can be averted with the way is
provided for procuring a sufficient
amount of currency to tide us over
in times of stress. The Federal Re
serve bank is unlimited in it's issue of
circulating notes. 1t may ISSUE eur
rency to an amount of 2k. times the
value of it's gold reserve. 1t may go
into the markets of the world and
buy gold and issue currency to an
amount of two and one-half times its
value. 1t may issue currency against
commercial paper in an amount
equal to it's full face value, provided
of course, it maintains the necessary
forty per cent gold reserve and in
time of stress the way is provided for
reducing it's gold reserve under 9
very small penalty.
Member bankssmay; by endorsing
their bills receivable pledge same
with their Federal Reserve Banks
and in return receive currency to the
full face value of the notes SO pledg.
ed. This provision in u new Law
for an elacticity to u currency will,
certainly be a great benefit not only
to the banking interests but to the
country in general. Then too, the ag
r%icultural west has been clamorinf
for years, for an amendment to on
national banking law that will per
nit us to. carry in u assets frs
mortgage farm loans which are pro
hibited under the old law. The new
law makes such a provision and W,
are permitted to carry a certain pc,
pect of u capital and surplus II
loans secured by first mortgages OF
improved farm lands.
One of Best Laws.
81 believe the new law is an ex
ceedingly good one, in fact one of tn,
best that has ever been placed upol
our Federal Statute books, but w
must not forget that while it bring
with it much hope and promise it ais
displays it's danger signals. Eas
money means increased speculation
and with the new law as with the old
pay day is sure to come. The panics Q
1851, 1873, 1893 and 1907 we're al
preceded by an easy money marke,
and. marching through life with tn