FRAGMENTS OF SCIENCE. 



567 



sequence that the resulting picture does 

 not have the appearance of being made 

 up of parallel lines, as in the case of re- 

 productions by the original Caselli pic- 

 ture telegraph, of which the system de- 

 scribed is a modification. The Hummell 

 apparatus appears to be entirely prac- 

 ticable, the simplicity of its synchroniz- 

 ing mechanism giving it a great advan- 

 tage over former types of Caselli picture 

 telegraphs. The apparatus has been 

 worked duplex with success. In one in- 

 stance, 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, dis- 

 cussing the recent adoption by the New 

 York banks of a rule imposing a " collec- 

 tion charge " on all country checks han- 

 dled, takes the view that the new rule is 

 a mistake. After reviewing the history 

 and present position of the Bank of Eng- 

 land; calling attention to the fact that 

 although it is a private enterprise its po- 

 sition 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 re- 

 serve, 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 paral- 

 lel is even closer. Just as the Bank of 

 England is encouraged to expect a modi- 

 fication 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 bank- 

 ing 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 ac- 

 counts with some New York bank. This 

 rule will save the New York banks 

 something like two million dollars an- 

 nually. It will not prevent any sol- 

 vent man from making remittances, 

 for if he has a deposit in his local 

 bank and his local bank has a de- 

 posit 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 pub- 

 lic, 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 safe- 

 guard against soft money we may fair- 

 ly say the only real safeguard is to pre- 

 vent the growth of a demand for soft 

 money. And of all the means of preven- 

 tion at our command the most effective 

 is the encouragement of the habit of pay- 

 ing 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 



