The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-02-06
But the Friends of Measure
Were Not on Hand.
CALLS IT A POLITICAL BANK
j. r. Burrow Says 1t Would Be
Crime To Pass Bill.
Senate Committee Listens to
Arguments Against 1t.

helpless child in the hands of its enc
mics without voice to defend it is
most always a woeful mistake. And
the parents and god-parents and spon-
sors and friends of the Bergen state
reserve bank bill may discover this
when the senate committee on banks
and banking makes it's report in the
near future--probably the last of this
week.
True to the prediction made in the
Topeka State Journal several days ago
to the effect that the friends of the
| proposed bank would boycott the open
meeting held for a discussion of it's
| merits by the senate committee, there
was not friend of the measure in
| attendance who was friendly enough
to utter one word in its favor. Not a
voice was raised in defense of its pur-
pose or to champion its merits.
But opponents of the measure were
there sixty strong, and. under the elo-
quent and able leadership of ex-Gov-
ernor Bailey, of Atchison, and j. r.
| Burrow, of Topeka, they literally tore
the infant to pieces and laughed mer-
| riIy over it's dismembered limbs
| Bailey compared it's proposed func-
| tioning to that of a branch line rail-
| road without a terminal at either end;
Burrow charged that its eSta bliShment
which would tie up the funds of the
state banks in a political bank would
be a crime; and the other speakers
including NJ. H. Malott, of Abilene,
f. H. Foster, of Fort Scott, and "Bill"
Wayman, of Emporia, said nothing in
its behalf 1t was understood that
Senator Bergen, author of the bill.
planned to be present, but he was ill
and could not attend.
Not Ready in Time of Stress.
Senator Snyder, of Leavenworth,
nf ha
meeting to order and NJ. H. Malott,
cashier of the Citizens State Bank of
Abilene, was the first speaker He
analized the bill, tore it to pieces and
laid out its.part SO those present could
look at it's alleged faults He brought
out the fact that it would absolutely
tie up all the funds of the state banks
because itiprovides that none of these
funds can be kept elsewhere than in
its own vaults. He told how it would
prevent its members from giving Gus
toners drafts on banks in New York
and other eastern cities without great
! inconvenience, and asserted that there
most assuredly would be three reserve
banks established If the bill became a
law. He asserted that its only pur-
pose could be the relieving of stress
in times Of stringency, and that this
could not be done because it would
have no power of issue. "In times of
stress it would not be worth a tinker's
udIn, ne asserted.
How Federal Reserve Saved Us.
When Malott had finished Bailey
was called to the floor The ex-gov-
ernor did not seem to deem the meas
ure itself -y,rthy of much considera-
ton except as a thing at which he
could poke fun. He devoted most of
his time to a discussion of the federal
reserve system, explaining it's work
ings and extolling its virtues and value
to the state and the nation-and to
! the state banks that are not mem
bers.
II am thoro1y and sincerely con-
WINGED that without the federal re-
serve system the world would not be
at peace today" he said. 81 am
thoroly convinced that without this
system we could not have licked the
4 Huns. The great burden of furnishing
money to the allies and of organic
ing and equipping and providing funds
for our own war preparations and our
armies would have broken down the
old financial system of the country,
and God knows how many banks
would have had to close their doors"
Bailey asserted that without the
power of issue a state reserve bank
could not be other than a failure and
gave it as his opinion as an individual
and not as a director of the Federal
Reserve system that state reserve
bank organized under the provisions
mitted to the federal system
In discussing the float evil that
the proposed bank would be expected
to remedy he said that the federal re-
serve banks attempted to do away
with this evil but that they found it
| impossible to wipe out the elements of
time and distance required to transfer
funds and were compelled to make a
| clearing charge. He predicted that
within two weeks after the esta bIish-
| mn 49, Il,
million dollars would be taken up in
caring for floats and asked where
the money to carry on the other oper-
atoms would come from
Bailey was followed by Wayman. of
Emporia, who asserted that it would
be wrong for the legislature to make
any citizen. or any corporation of the
state do anything that was wrong and
by saying that it would be wrong to
force the state banks to Join the pro-
posed state reserve system. He said
that he would be opposed to the bill
because of the fact that it would con-
f1ict with the Federal Reserve system
if for no other reason.
F: H Foster of Fort Scott, whose
bank was the first state institution in
Kansas and the first in the Tenth fed
eral reserve district to join the fed
eral system, then explained the adj
Nantages he got in joining, and then
j. R. Burrow was called upon to ex-
press his views.
A Crime, Says Burrow.
| MY banking interests in Kansas are
about equally divided. between state
and national banks,'' he said, but
am opposed to this measure and con-
slider it would be nothing short of a
crime to pass a law compelling the
state banks to join in such a system"
Burrow said that when the federal
reserve system was first organized he
opposed it and denounced it as Demo-
cratic deviltry, but that, like Bailey.
| he is now convinced that the war
could not have been won without it
and that it is the greatest institution
ever put in operation in the financial
/ history of the nation.
! AT the close of the meeting Senator
| SNYDER ANNOUNCED that the SUPPORTERS