Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-06-11
USE OF THE SURPLUS
Problem Being Studied by a
Government Commission.
PLAN OF DIRECTOR ROBERTS
Says Example of Other Nations Should
Be Followed.
FAvORS A UNITED STATES BANK
Declares That the System Has Been
Approved by the Experience Of
Every Important Country.
PLAN OF DIRECTOR ROBERTS
FAVORS A UNITED STATES BANK
BY WILLIAM z. CURTIS.

Herald.
The committee appointed by Secretary
Cortelyou to devise plan for keeping the
surplus receipts of the treasury in circula-
ton and preventing them from piling up
in the vaults is still wrestling valiantly
with the problem. They have found it
more difficult than they expected Insur-
mountable objections arise whenever any
new scheme is suggested. Geo. E. Roberts
director of the mint, who is a member of
the committee and has given the subject
long and serious study, said yesterday that
in hts opinion there is no complete cure eX
cept the adoption of the system which has
been approved by the experienc of every
other important country in the world, and
that is, sem-ofticial central bank to stand
business world.
Everything short of that VII be a make
shift and an experiment" said Mr. Roberts.
Among well-informed men the opinion is
general that such a solution would be ideal,
but they recall our experience with the old
Bank of the tnited States and say it is
useless to attempt to re-establSh that Sys
tenn. Precautions may be taken to elimi-
nate every factor which proved objection
able in its organization. 1t was compare
lively close corporation, with part of the
stock held in Europe. The proposed CEN
trail bank would be owned by the national
and state banks of the country. The old
bank was in competition with the other
banks of the country: the proposed one
would be the browning head of our national
and state bank systems, a uIifying bond
for the thousands of individual institutions.
The old bank was controlled by few in
diyiduals and in all its aims was a private
concern. the proposed bank, with its stock
held by the bankers in every part of the
country and with a board of directors from
every section and containing men of all
political views, could not be used for politi-
cal or private ends, while its relations to
the government and division of profits
with the treasury would prevent monopoIis-
tic tendencies.
The central bank would not only dispose
of the VeXatlOuS problem of bank deposits.
but strengthen the entire financial fabric
of the country. 1t would solve the problem
how to give some degree of elasticity to the
currency, for there is not the same oppos-
ton TO so-called asset notes issued by such
an institution that exists to granting that
function 10 six thousand individual banks
Experience of Other Countries.
The people of nearly every other import
ant commercial country of the world have
worked these problems out to their satisfac-
ton. and it is significant fact that they
have come all to practically the same sys-
tenn, said MIR. Roberts. The French have
Entrusted to the Bank of France a semi
official institution, with ca ital of 1872, 800
ocp francs, these functions. which they have
deemed impractcabe for the minister of
finance to discharge, and the management
of French finance has been the admiration
of the world. The Germans are as hard
headed in business affairs as any people in
the world. and they have intrusted these
functions to the Imperial Bank of Germany
with capital of 10000 600 marks, of which
the chancellor of the empire is the official
mead. Inc Japanese are recognized as thor
ough in whatever they undertake They
copied our system of national banks in 1872
providing circulating notes based on depos-
It's of government bonds, but they have
since established the Bank of Japan mod
eled after the Imperial Bank of Germany
agency through which the government con-
ducts its fiscal operations. Russia Austro-
hungary. Italy, Spain the Netherlands and
all other European countries manage fheir
nScal aHalrs IN the same manner. The sery-
ices of the Bank of England to the British
government are well understood but its
system of note issues is generally recog-
nized as inferior to that of the Imperial
Bank of Germany. These great semi-officiaI
institutions, by which other governments
correlate their treasures to the business
ls1actorily Why may We not profit by their
experience?
Proposed Central Bank,
"Unification and Capitalization are going
on in financial circles now" went on Mr.
Roberts, land to an extent not perhaps
fully appreciated. The great banks of New
York, with their connections are more
powerful relatively now than they would be
with central banking institution domi-