Show LIABILITIES AS RESERVES Chairman Fowler of the congressional committee on banking and currency currency has lias been telling tales out of oC school about the way wa national banks have hae mis misused misused misused used their notes as reserves for trust companies and state banks Accord AccordIng AccordIng Ing to him it is common practice for forn national n banks to deposit d their notes lIth trust tr st companies In which they are Interested drawing Interest on the notes and then permitting the trust com corn companies companies panics to use these same notes as part of oC their reserve Mr Ir Fowler calls attention to a fact known by all bankers that these note Jote issues I ues are ar tn rei serves they the are r kite re liabilities pure pur an simple promises to 16 pay nail and nothing else To use them as 11 reserves is only to inflate the currency and invite dis die disaster disaster aster whenever contraction demands a I return to sound assets as the basis of business I Although this condition exists the na national national national banking law cannot reach the evil because the which abuse the sound principle of oC reserves are state concerns amenable only to t state laws It behooves the individual states therefore to Investigate and remedy such conditions where they ex ec 1st st No o better time for tor such an Investigation could be found than the pres present present ent ant when the public Is ready to accept n Improvement In banking methods and financial conditions are s solid that the remedy can be applied without in InjurIous jurIous effects Probably it would be found that most of oC the of this sort is limited to to the till east where here Ute tile heavy reserves of oC the th country find lodgment lodgment ment mont and mid If IC this Is true the rigid re reforms reforms forms torms which have been undertaken in inthe inthe inthe the big financial centera will be ex extended ext extended tended t to th thin practice p cU without IU o t difficulty difficult culty cult |