[Volume XXVh
THE CHICAGO BANKER
10
The Wisconsin National Bank
OFFICERS
GARDNER P.STICKNEY, Vice-President R. L. SMITH, Assistant Secretary
OLIVER C. FULLER, President FRED. C. BEST, Secretary
OF MILWAUKEE
CAPITAL -	§2, OOO, 000
SURPLUS -	1,000,000
OFFICERS
L.J. PETIT, President	HERMAN F. WOLF, Cashier
FRED’K KASTEN, Vice-President	L. G. BOURNiQUE, Asst. Cashier
CHAS. E. ARNOLD, 2nd Vice-President	W. L. CHENEV, Asst. Cashier
WALTER KASTEN, Asst. Cashier
DIRECTORS
L.J. Petit	Frederick Kasten	R. W. Houghton	Oliver C. Fuller
Herman W. Falk	Geo. D. Van Dyke	Gustave Pabst	Charles Schriber
Isaac D. Adler	H. M. Thompson	Patrick Cudahy
Wisconsin Trust Company
MILWAUKEE
CAPITAL -	$500,000 - ־
SURPLUS 100,000 ־
DIRECTORS
Oliver C. Fuller Gardner P. Stickney
R. W. Houghton Custave Pabst Patrick Cudahy
Frederick Kasten Charles Schriber H. M. Thompson
L. J. Petit, Chairman Herman W. Falk Isaac D. Adler

the bank for their respective positions for long periods of time, or for life, subject, of course, to removal for incapability or malfeasance in office.
Many believe that a provision in its charter which would provide that the secretary of the treasury and the comptroller of the currency be members of its board of directors would give the government sufficient supervision over a central bank.
This is only a matter of detail—important, it is true, but still a matter of detail, since its charter could be such as to keep the bank free from political influence or intrigue.
The restriction regarding paper eligible for discount should be so severe that no paper representing a speculative transaction would be admissible.
When the United States bond-secured, national-bank-note circulation is retired, the central bank should have the exclusive right of note issue, but that would come about largely through a process of evolution which would not disturb business conditions.
The establishment of a bank along these lines, with the details properly worked out and fully described in its charter would, with some slight modifications in our present national banking law, give us the desired relief.
In 1907 we had in the United States one billion seven hundred and eighty million dollars of gold coin, of which amount one billion one hundred million dollars was held in the treasury, yet we turned to Europe for assistance, with the result that the Bank of England alone furnished us directly and indirectly one hundred million dollars of gold.
When you consider that the average amount of gold carried by the Bank of England during 1907 was only about two hundred million dollars, or one-ninth of the amount in this country, or one-fifth of the amount carried in the vaults of our treasury, it 'will furnish food for reflection.
Bank of Germany and the Bank of France. In the case of the former, a metallic reserve of 33T3 per cent is required. Under this its average reserve in metal to its outstanding notes is around 75 per cent, and during the panic of 1907 its reserve of metal against its notes did not go below 41 per cent.
The Bank of France, while not required to carry any definite percentage of coin reserve against its outstanding notes, is given the right to issue its notes to the extent allowed in its charter, so long as it maintains a coin payment of its notes as they are presented. In practice, the Bank of France, like the Imperial Bank of Germany, carries a very large metal reserve.
I would provide for the supervision of this bank along lines somewhat similar to those governing the Imperial Bank of Germany, or the Reichsbank, by the appointment of a general governmental supervising or overseeing board, the members of which should be appointed jointly by the President of the United States, the secretary of the treasury, and the comptroller of the currency. I would require that the appointment so made be approved or confirmed by the senate, and I would so arrange their terms of office that the majority of this board should not go out of office during any period of eight consecutive vears—thus providing against a change in the policy in the management of such a bank, even though we should have a “freak” administration for two consecutive terms.
I would have another board selected by the stockholders, the members of which would confer with the officers and this supervising board, but in order that the management of the bank might be entirely removed from polictics, and to prevent the possibility of any syndicate gaining control of the bank, I would have the supervising-board. after they had conferred with the board representing the stockholders, vested with full power to appoint the directors and president of
sufficient to enable the bank to carry a coin reserve equal to its outstanding notes, we must find some other way by which we can require that these notes will be secured and at the same time give us a safe and elastic form of currency which will expand or contract automatically as the requirement for discounts increases or decreases.
Permit me to say in this connection I believe the notes of the bank should be secured in part by a coin or metal reserve, but if we secure the relief we need, a considerable percentage of the notes thus issued must be secured in some other way. What shall we require this security to be? It should be a security which, in the natural course of business, will first be redeemed and through its redemption or payment bring into the treasury of the bank actual money.
What character of securities have we in this country that is most available for this purpose? Is it bonds which do not mature for years to come and which, in the nature of things, even then will be renewed? Is it mortgages on real estate running for a shorter period, but still having a maturity some years in the future ? No. it is neither bonds nor real estate mortgages.
If it is wise to restrict the character of the paper which will be eligible for discount at the bank to that which will be first paid to a commercial credit or to paper representing an actual transaction in business between solvent concerns, why should we not make paper of that character, with a certain' required percentage of coin reserve, the basis of security for its bank notes ? Its use for this purpose would insure an elasticity in the note as a circulating medium, and the notes which would be issued by the bank in times of stress would automatically contract and be retired from circulation when the transaction creating the credit had been completed and the credit paid.
This is the method employed by the Imperial