Page:Popular Science Monthly Volume 55.djvu/585

Rh that the resulting picture does not have the appearance of being made up of parallel lines, as in the case of reproductions by the original Caselli picture telegraph, of which the system described is a modification. The Hummell apparatus appears to be entirely practicable, the simplicity of its synchronizing mechanism giving it a great advantage over former types of Caselli picture telegraphs. The apparatus has been worked duplex with success. In one instance, a few days ago, a picture was sent from New York to St. Louis while one was being received from the same place in New York, the latter picture in addition being received simultaneously at Boston."

The Charges on Country Checks: an Economic Mistake.—An article in the May issue of the Yale Review, discussing the recent adoption by the New York banks of a rule imposing a "collection charge" on all country checks handled, takes the view that the new rule is a mistake. After reviewing the history and present position of the Bank of England; calling attention to the fact that although it is a private enterprise its position is used as a governor, so to speak, of English finance; the similarity to it in position and power for good or evil of the association of banks known as the New York Clearing House is pointed out; the review goes on to say: "In the associated banks of New York, as in the Bank of England, is kept a very large part of the reserve on which the great financial transactions of a whole country are based. The system of 'reserve cities' for holding large deposit accounts of country banks, in which New York is by far the most important center, is but the recognition in the national banking law of this great fact of a central reserve, and the power of utilizing such deposits, indirectly extended by the law which allows and encourages country banks to hold a large part of their legal reserve in the form of deposits in New York, probably constitutes a much more valuable privilege than the rights of note issue enjoyed by the Bank of England. In extraordinary emergencies the parallel is even closer. Just as the Bank of England is encouraged to expect a modification of the restrictions on its right of note issue, as a means of extending its effective currency reserve in times of panic, so the New York banks, by their system of clearing-house loan certificates, are encouraged and expected to evade those provisions of our national banking laws which restrict their power of issuing notes to meet an emergency.… The exercise of this function of holding a reserve for clearing the business of the country is attended with some expense, as well as with much profit. One of the most vexatious of these expenses has been the cost of collecting country checks.… Under these circumstances they have adopted a rule imposing such charges on country checks as to compel a large part of the remittances to be made in the form of bank drafts on New York city, rather than individual checks on country banks supposed to have accounts with some New York bank. This rule will save the New York banks something like two million dollars annually. It will not prevent any solvent man from making remittances, for if he has a deposit in his local bank and his local bank has a deposit in New York he can buy a draft to send as a remittance, which will pass through the New York Clearing House without question or expense. Yet, in spite of these plausible arguments, we believe the action of the New York banks to be a mistake of very serious magnitude, an inconvenience to the public, a probable loss to deposit banking in the long run, and, worst of all, a serious blow to the cause of sound currency throughout the country. It seems to us, in short, a case where narrower duties and economics have been allowed to crowd broader ones out of sight." The review then goes on to show how great an amount of inconvenience and loss of time in the aggregate the new rule is going to cause, and finally says: "In a popular government the greatest safeguard against soft money—we may fairly say the only real safeguard—is to prevent the growth of a demand for soft money. And of all the means of prevention at our command the most effective is the encouragement of the habit of paying by checks. The habit of paying by check is very general in all large business centers, and has been rapidly extending into the smaller centers, and the most serious public danger in the action of the New York banks is that it seems