Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-04-14
BIG BANK FOR NEW YORK
Gotham Finanoien Considering Plan to
Prevent stringency in Money.
SCOPE OF PROPOSED INSTITUTION
series OF auestiOns sent TO All Bank
ers in United states Relative
TO Needs OF the
InstitutiOn.

NEW YORK, April bit was learned
today that a plan is under discussion
among certain bankers in this city to estab-
lish bank with a capital OF 900 for
the purpose OF regulating money rates and
preventing periods of money stringency 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 mem
toned in connection with the plan and one
suggestion was made that the stock Of
that bank be increased by S25,OOO,0OO or
100000 in order to give 1t control OF the
financial situation in this city sufficient to
prevent the recurrence of periods OF eX-
treme high rates for money. Another sug-
gestion was that trust company be organ
lied under the direction of the National
City bank. officials OF the bank declared,
however, that they were not taking more
than passing interest i'm the various plans.
Some financial concerns which have taken
an interest in the movement assert, that
such an institution might exercise consider
able control over the foreign exchange
situation, TO the extent of regulating inn
ports and exports OF gold, somewhat as
does the Bank Of England. A leading bank
Official, however, said that the only cure
AOI SUN HlOllty Evils as Ailt ANtN VI n
market has recently witnessed lay in the
establishment of a central bank, which
shall be given the power Of issue in times
Of emergency.
1t 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 Commerce to clearing house committees
of the leading cities of the United States
The banks are asked to notify the New
York committee whether they believe that
a central note-ssulng bank, similar to
those in France Germany, Austria Hun
gary and other countries in Europe. and
with branches in the leading cities and the
power to re-discount for national banks
and state banking institutions, but not for
individuals, would be a better solution of
the present currency problem than a plan
permitting all banks to issue notes against
their resources.
other Questions Asked.
Also the following questions:
Would a central note issuing bank tend
to diminish fluctuations in the rate of in
terest, to prevent recurring periods of mon
| incident to financial crises?
Should such a bank be made the fiscal
| agent of the government in receiving gov
eminent funds and paying treasury drafts
as are the central note Issuing banks Of
| Europe?
Would the opera tons Of such bank in
! terfere unduly with the business OF exist
! ing banking institutions, provided II dealt
only with banks and not with individuals?
Should the government appoint the Of
! fcers OF such bank and a majority Of
| the, board Of directors, or should the con-
/ troll rest with the stockholders?
| Do you think the headquarters of such
a bank should be in Washington or else
Do you believe that there are sound po-
| litical objections, apart from it's economic
| merits, to the creation of such a central
bank?
DO you believe that some change is de-
/ sirabe in the existing system of issuing
bank note currency?
system Is disturbing factor in the money
| market?
II so, do you believe that provision
should be made for regular deposit in, the
banks of the surplus of government funds,
above reasonable working balance, upon
such terms as will afford safely and per-
haps a small profit to the treasury?
| Do you believe that national banks
| should be authorized to issue a certain
| proportion of currency upon their general
| resources, such notes being secured in
wise?
is it advisable. IL additional bank note
| circulation is authorized, to subject II to
| a graduated tax intended to compel the re-
| tirement of the notes under the higher
| rates of taxation when the special need
for them has passed?
II you do not favor the issue of currency
under moderate rates of taxation for use
| under ordinary conditions, do you favor
an emergency circulation issued under a
high tax, as proposed by Secretary Shaw
| in his annual report for 1906?
DO you favor the constitution of a guar
anty fund from the proceeds of the taxa
| ton TO cover the losses on notes for which
the assets Of failed bank are INSULT
| Cient2