The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-04-14
MAMMOTH BANK.
One Planned With a Capital Of
Fifty Million Dollars.
To Regulate Money Rates and
Prevent Stringency.
POWER OF NOTE ISSUE
To Be Exercised in Times of
Financial Emergency.
Questions Sent Ous to the Lead.
ing Clearing Houses.

New York, April IA plan Is I'M
der discussion among certain bankers
in this city to establish a bank with
a capital of s5o.000.o 600 Tor the pur-
pose of regulating money rates and
preventing periods of money strin-
gency and accompanying high rates of
interest. The movement was given
some impetus by the recent stringency
in the money market. The name of
the National City bank was men
toned IN connection with the plan and
one suggestion was made that the
stock o he bank be increased by 225.-
600, 600 OF s50,00O,000 in order to give
it a control Of the financial situation
in this city sufficient to prevent the
recurrence of periods Of extreme high
rates for money Another suggestion
was that trust company be organ
lied under the direction of the Ma
tional City bank. Ofncials of the bank
declared. however that they were not
taking more than a passing interest
in the various plans.
Some offlcias seoncerns which have
taken an inteFestEin the movement as
sert that such an institution might ex-
ercise- considerable control over the
foreign exchange situation, to the ex-
tent of regulating imports and exports
of gold somewhat as does the Bank of
England. = leading bank Official
however, said that the only cure for
such money evils as the New York
market has recently Witnessed lay in
the establishment Of a central bank
which shall be given the power Of is
sue in times of emergency.
It was ascertained today that a
series of questions bearing upon this
subject has been forwarded by the
special currency committee of the
New York state chamber of com
merce to clearing house committees of
the leading cities of the United States.
me bankers are asked to notify the
New York committee whether they
! believe a central note issuing bank
similar to those in France. Germany
austria Hungary and other countries
4 III Europe, with branches in leading
/ cities, and with the power to redis-
4 count for national banks and state
/ banking institutions, but not for in
4 dlNlduals, would be a better solution
! ofthe present currency problem than
pan permitting all banks to Issue
notes against their resources p
Also the following questions:
would central note-issuing bank
tend TO diminish fluctuations in the
/ rate of interest to prevent recurring
/ periods of monetary stringency and to
/ lessen the evils incident to financial
/ crises?
should such bank be made the
hscal agent of the government in re-
ceiving government funds and paying
treasury drafts, as are the central note
/ issuing banks of Europe?
! Would the operations of such a bank
interfere unduly WITH the business Of
existing banking Institutions provided
Il dealt only with banks and not with
Individuals
Should the government appoint the
officers of such a bank and a majority
Of eJ7r },
control rest witf92the stockholders7
DO you think the headquarters of
such bank should be in Washington
or elsewhere?
DO you believe that there are sound
political objections, apart from its eco
I nomic merits, to the creation O such
a central bank?
DO you believe that some change IS
desirable in the existing system of issu-
| ing bank note currency?
DO you believe that the subtreasury
system IS a disturbing factor in the
money market2
IF so. do you believe that provision
should be made for regular deposit in
the banks of the surplus of government
funds above a. Reasonable working bal
ance, upon s1cf1aterns as will afford
safety and perhaps asarnaH profit to the
DO you believe that national banks
should be authorized to issue a certain
proportion of currency upon their gen
eraI resources, such notes being Sc
cured in case of failure by a guaranty
fund or otherwise
rs it advisable, if additional bank
note circulation is authorized, to sub
ject it to q graduated tax intended to
compel the retirement of the notes IN
der the higher rates of taxation when
the special need for them has passed
= IF you do not favor the issue of cur
q. rency under moderate rates of taxation
for use under ordinary conditions. do
you favor an emergency circulation is
sued under a high tax, as proposed by
Secretary Shaw in his annual report for
1862
do you favor the constitution of a
guaranty fund from the proceeds OF
taxation to cover the losses on notes
for which the assets of a failed bank
are insufficient