New-York tribune., 1907-12-17

be held in cash by all the banks and require all
the reserve deposits be kept with central bank
The increase in cash reserves from TO 10 or
help bank very much WIEN il had any large de-
mand for It's deposits What such bank needs
is safe reserve in cash and further reserve with
a bank where il is surely available at any time
in euTreGGy This T9uld be the case with IeseFbe rye
deposting bank could be sure That at any time as
bank and get any amount Of cash needed on the
notes Of Its customers or other good security
With such a bank to depend on. no solvent bank
demands.
whole. should have become involved as they have
and not only their business but that OF all their
customers, have been disturbed as II is to-day
M that IS needed t 10 faHe inns ana
bank reserves. both OF which could have been sup
Piled by the central bank Of issue and reserve IL
exchanging any reasonable amount Of deposit
credits to note credits without depicting cash re-
had were on deposit where they would be irnrnedi-
have bnen no alarm among N he There would
have been no, scarcity OF currency no derange1
have been panic among the banks nor among
the people
ON BANKNOTE CIRCULATION
The present banknote circulation can be best
improved and made elastic by permitting the banks
issue a fixed percentage OF their note secured
circulation or capital In & notes une0Sered by bond
ored 70 tbe same reserve as aganst de-
posts. il VIII preserve the similarity which is 9ee-
These notes can be made perfectly safe by guar
antee fund of not more than per cent which
quired redeem the notes OF failed banks based
should be a graduated rate of taxation on these
notes. beginning with not more than 2l2 per cent
such notes to our system would do much TO. i'm
IT, but stin it Is not believed that il would he
all the credit notes issued by central bank OF
issue
The use of clearing house certificates by the
banks has been found Yer efficient means for
b1v pTsyented a great number Of bank failures
eeston that the Clearing House should be recos-
nized by law and authorized, under certain con-
ditons to clearing house certificates tor use
idea might make , ,b eat a. ng bafWsv m
The fun development Of the national Gig1T
should carry us further and to the inevitable and
logical conclusion and lesson To he drawn from u;
which ns of is isane tRa' AND %d TaserTe TnoGa nave
Instead Of stepppgg, at arb se rdsT c2edt G aoe
on large scale. IL would oe far better 70 paw
mFnf authority and under proper laws and reguia-
tons This could be done far more syssmstnsadE en-,
vantages of the other system, and would have all
its and Of arT propsT bank would
no, only be a great benefit 20 all the business ol
III. counIg and e srfe' ths probe Of the relations
Of Treasury department to the business % @ ,nd
eficient system in handling our government
ng System It would shield and protect the Cit
INK Ils ~ III Tho relations which vital TO him
the CONDUCT OF his nuSngss Sssit :" f he case
n,,r treasury Department must have vast trans
o"tions I'm the collection and disbursements OF rs
revenues which vitally affect the business OF the
country every day of the year
,apv mans have been suggested for the or~anI
zaton and control of a central government bank
under government control so thFt W c"n'o neVer
be monopolized used by any man or SET OF men
- should be kept out OF politics Ihe Ien chosen
- . S its managers and directors should be men
the highest character and ability whose duties and
he OF
itest "f the bank II would not he dr7~IIlt to
ancomrIish this end by having the control diride''
certain directors elected ny the shArehod
W and = certain number chosen hy the govern
unent.
CENTRAL. BANKS LIMITATIONS
-r, hank should not bc allowed do n general
49, commercial business hut should be confined TO
tho transactions of the government business, tne
. ofher banks the discount rf their paper
nr,ved security rediscounting notes of their
cnstoraers for other banks II should also haNr
.u i r,ght ~ dea in United STATES government
tnods and probably the bonds of states and mu-
;inslties but not in stocks. Il should have such
snshla il to accumulate gold credits abroad and
import gold and bullion when needed Tor It's fe-
IT, mai, oifa of the central bank should be in
the civ of Washington and such branches estao-
f,,,rd Its note issues should ne
rredit notes the in Germany ai,d france
,,av of a very large gold reserve, the halance 70
ho covered by bonds of the government or othet
approved issues by the notes dlseounteo oS y
% The central bank if given the exclusive right 70
issue credit banknotes as y snouin ri,, ths
aamand which could be determined automattcally
md with precision through its relations vih ne
n cbanra i'm the present bond-secured notes cS
ths uationsl banks, and would therefore, nc, dssfo
the present volume Of the currency or make any