Chapter LIV: Section 63: That any national bank that shall count any national bank

note or notes as a part of its reserve shall pay into the American Reserve Bank a penalty of 10 per centum per diem on the amount so counted, and any national bank that shall, after January first, nineteen hundred and fourteen, count any bond-secured bank note as a part of its reserve shall pay into the American Reserve Bank a penalty of 10 per centum per diem upon the amount so counted.

COMMENT:--If there is one evil that should be crushed out in this country more than any other it is the practice of carrying debts as reserves. No bank should be allowed to carry any other bank's notes, any more than any other check or draft which it thinks is good. It has been this abuse of bank credit that has led to more trouble than almost any other single thing. It was the requirement of coin reserves and current coin redemption that made the banks of Virginia, Louisiana, Kentucky, Ohio, Indiana, Iowa, Missouri and the Suffolk System such perfect successes.

Here is the crux. The very soul of sound banking is current coin redemption. So let us not fool ourselves by putting wind and water into our reserves.