[Volume XXVII
THE CHICAGO BANKER
18
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Volume of Business			LEWIS E. PIERSON. Prest.
for Year 1908 Exceeded			JAMES E. NICHOLS, Vice-Prest. ROLLIN P. GRANT, Vice-Prest. BENJ. F. WERNER, Cashier. <^C&799Si5c*\9^>
One Billion Two Hundred Million Dollars			DAVID H. C. PENNY, Asst. Cashier. HARRY E. WARD, Asst. Cashier. N. Y. CITY
				
Logan C. Murray’s Eloquent Address
are not to be put aside for any horrible, dastardly idea in the brain of any man.
If the political parties conclude that a “Postal Savings Bank” must be enacted simply to satisfy the ignorant foreign population mainly which know nothing but government control when the savings banks of the country are to be put in competition with the government as a depository, let us see to it that no such law be enacted and no such rate of interest allowed as would make the government a competitor. I would say not above i per cent per annum, if indeed there must be postal banks.
If you will pardon me I will give you some views on the great question of a central bank. Will it not be helpful if the national banks of the country subscribe for stock in a central bank, and depending upon it for rediscounting, instead of depending upon the reserve cities for rediscounts of their paper, as at present ? The details of such a bank and the plan to be worked out with great care, and my judgment is, if worked out, a real beneficial reservoir of relief may be established independently, practically, of the government. Heretofore we had depended upon the secretary of the treasury putting money into depository banks, when money was stringent. This could not be done now, as the treasury has less money than the banks. Under the Aldrich-Vree-land bill, the secretary of the treasury to give relief would have to decide a crisis present, to allow the banks to put up their municipal and other bonds on which he would allow them to issue their own currency to the amount of their capital and surplus. This is possibly a good provision for any crisis which might arise before the enactment of the ideal central bank bill.
I would suggest that before a central bank charter could be procured from congress permitting the issue of its bank notes, which of course, would be a departure from the present issue of national bank notes, inasmuch as they would not be secured by a lodgment of United States government bonds, as we now have to do, that there will have to be a decided campaign of education, not only of the people, but for congress, before the central bank bill comes to pass, and I think we can confidently depend in the immediate present on the secretary of the treasury, under the. Aldrich-Vreeland bill, supplying new (Continued on page 22)
Decatur Convention
tailing expenses, in every possible way, of the government so as to leave as much as possible to that Panama fund, and whenever the congress is urging further appropriations, that there shall be a halt called. Congress evidently intended not to issue bonds fully fori its construction, but that the excess should be provided for by the income of the government.
Even though the income of the government is greatly increased by returning prosperity, this rigid economy in appropriation should continue rigidly enforced.
It seems to me the only prudent course for the government to pursue at this time. It seems that in each of the committees of congress now at. work on appropriation, that this economy should begin in each department in their calls for public funds, and the watchword which should sound on trumpet-lips is “Economy in Appropriation” of public funds.” Do not the bankers of the country have a right, seeing that national banks are the heaviest creditors of the government, to speak pointedly on this subject? So from this prudent source it shall have respectful hearing. Thirty years ago the expenditures of the government were 135 millions annually, and last year they were 662 millions with a great canal yet to build.
The “Central Bank” proposition is one which seems to have much favor with many important people. Where shall it be located? Who shall pass upon the credits? What the basis? The detail of the workings of a central bank of this magnitude should have the greatest care to provide and to prevent.
I will not insult your intelligence upon the “Guaranty of Deposits,” but behold the trouble on now in Oklahoma concerning a recent failure there. Read it and judge for yourselves. The natural laws which govern business and banks
When your association was good enough to ask me to appear before it, I cast about to see if there was anything which I could say, which would interest you after having had so exhaustive a meeting at Chicago recently, and it occurred to me that if I would make a salmagundi dish and sum up as it were, all the thought which had so ably been brought forward, such as consideration of the “Postal Savings Bank” suggestion—the “Guaranty of Deposits,” the “Central Bank” and “General Reform of Currency”—all of which are of imminent importance, but, I have no doubt at this time nearly every intelligent banker has made up his mind as to how he feels on the above subjects.
“The Guaranty of Deposits”—the “Postal Savings Bank” and the “Central Bank,” I am sure when we contemplate the condition of the treasury and that it has before it the great question of providing for the building of the Panama Canal—the moral question of protecting the credit of the government in keeping the two-percent-government-bonds above par, its only hope is its moral obligation to the national banks of the country after they were induced to take so many bonds for circulation and promised a deposit of the proceeds, afterward drawn upon to the minimum. It is therefore a moral obligation of the government to protect these banks which bought heavily of government bonds for circulation under Mr. Shaw’s administration of the treasury, for a market must be made, for more bonds. To my mind the first step in keeping would be, to stamp it a moral obligation, and would be good business on the part of the secretary of the treasury. The preparation for the coming congress should be an economical budget for each department of the government; viz., that in no department what they could use advantageously, but what it the least they can do with, when they ask congress for an appropriation.
And it becomes the duty of the bankers of the nation, seeing that they are vitally and directly interested in this question, that they shall take a hand and great care, to see that the economies of the government are exercised to the greatest extent, so that there may be provision for the building of the canal. It must be money which will not be from the selling unduly, and to the disparaging degree, of more bonds, but to the cur-