Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1907-12-03
new YORK BANKER ARGUES
FOR CENTRAL GOVM'I BANK
/ N seTgmaa Urges This Plan as the Only Substantial
Proposition to Prevent Recurrence Of Currency
StfiRgenCieS in the Future


had got our own house in order.
Until we have a stable and elastic
currency system we will be constant
~ subjected from time to time to
acute and humiliating financial con-
ditions like those that now confront
ug. &1-. @ 80
Congress has not been able to en-
act as yet any permanent plan of
relief, and this has been chiefly due
to two causes, first, the fact that our
legislators have not as yet given suf-
fcients time and thought to an in
telligent, scientific and responsive
currency plan, and second, their in
ability to unite on any definite plan.
The country now imperatively de-
mands some intelligent relief.
Eve have had numerous tentative
schemes offered; the Baltimore plan,
'97. the Carlisle and Fowler bills, the
McCleary and Gage bills, the mon
etary Commission of Commerce
and American Banking Association
plan, O6. All these plans practically
provide for: asset currency, i. e., the
right to issue emergency currency
based on certain proportion of their
bond secured circulation, having first
lien ON the assets of the bank, SUBJ
ject to a tax to provide for any pos
sible losses. The weakness of these
last two plans has always appeared
to lie in the fact that the graduated
rate of interest is not sufficiently
high to insure the rapid redemption
in normal times and also not suffi-
GENTLY high tax rate to prevent the
issue of notes in advance of irregular
requirements. 1t is likely that some
measure of relief would have been
afforded to the country if any one
of these plans had been in operation
during our present crisis; at the
same time it would serve only as a
palliative and not as cure.
| There is truth in the statement of
Lord Rothschild when he characteriz-
ed this country as financially uncivil-
4 lied in its banking methods.
THE spectacle presented today by
our currency to the civilized banking
community of the world is simply
shameful
Emergency clearing house certif-
Gates have been issued in nearly all
large cities; cashiers checks and
,scrips have been circulated to take
/ the place of currency. and all devices
/ imposed on the community to take the
place of currency which has been
boarded. The United States govern
ment in the person of Secretary Cor
/ telyou, has come to our assistance in
the present jnncture and has helped
4 the situation by depositing nearly all
/ treasury funds in the banks, and has
also devised other measures of relief
4 to prevent an actual cessation OF bust
/ ness. + He has ably fulfilled the task.
These measures only accentuate
more pointedly that in order to obvi
ate such temporary provisions for re
lief measures some permanent, 1ogicai
4 and intelligent plan must be thought
out 4
When confidence is shaken it Is
inevitable that the community viii
tend to hoard gold and currency. Sucf
unhealthy conditions are substantially
unknown abroad. Crises and panic.
:, are, of course, possible everywhere;
no monetary system can be devised
, TO prevent panic; but an intelligen
and elastic banking system can al
!. ways be relied on to keep off wide
/ spread disaster. 1t is true, gentle
= men, that it is difficult to induce
4 community to depart from It's tradi
!, tions, but the time has now com
!, when we should be guided by sucl
= foreign systems as have been work
& ing satisfactorily fer centuries. an,
+ which, in times of panics and stress
] have fully met all expectations an,
/. conditions, refer to some centra
i banking system, II
This central or government ban
& should be owned jointly by the go,
! eminent and the national banks. Th
8 secretary OF the treasury and the cor
s troller Of the currency should be reI
d resented on its board. The treasur
funds should be deposited with th
i central bank and the government
{, bank should have power to issue note
{ in certain proportion to its gold X
i serve or capital. AS it is likely tina
e the sole right Of such note issu
d would be opposed by orr nationa
i banks. and any radical plan for go,
b ernnent bank would probably not pas
g congress at present, an alternativ
e plan has been admirably deveIope
a a.. ~.