The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-11-16
A PROBLEM IN BANKING.

In an address recently delivered be-
fore the Nebraska State Bankers assoc
citation, George E. Roberts, president
of the Commercial National bank of
Chicago, in discussing our recent none
tary system of the United States
strongly advocated a central bank of
issue similar to the Imperial Bank of
Germany or the Bank of France. His
address is of particular interest. al the
present time when everybody is dis
cussing manufactured panics and
money strihgencies.
Realizing that this idea was met in
many quarters by the theory that the
officials of the central bank might be
corrupt he took occasion to remark
that he believed this government is
honestly conducted, and never more
so than now, and added:
why, if you are afraid that the
managed of a central bank, supervised
by treasury officials, might abuse its
powers, how do you dare leave such
powers in the secretary of the treasury
as he now holds? He has $3.50, 1000, 900
on deposit in banks today, and he
could cali for it all tomorrow if he
wanted to and stop every wheel in the
United States. In the fiscal year ended
June 80. last, the surplus revenues
amounted to sS7 900 900. and if the sec
rotary of the treasury had taken no
action, but simply allowed that money
to flow into the treasury and stay
there. industry throughout the United
States would have been paralyzed.
What do you think of placing such re-
sponsibilities as that upon the discre-
ton of single individuaI?"
Mr.. Roberts scheme is to organize a
say, 350.000.0o0, with the stock ap-
portioned to several hundred banks on
the basis OF their capital and make
the institution one to do business with
and for the other banks. He would
have the stockholders elect a board of
directors by territorial districts. Every
section of the country would have a
representative of its own choosing on
the board. Then there would be an
other board composed of government
directors, of which the leading officers
OF the Rational treasury should be
members, and the active officers of
the bank would be selected by the joint
action of these two boards, and the
boards ha
management of the bank as in the case
of the Bank of Germany
This bank should take over all the
government moneys. That would end
the whole vexed question of the gov
eminent deposits. Every bank in the
country, by reason of its stock in the
central organization. would have its
proportionate benefit from the govern
ment deposits. The central organiZa-
ton should have the privilege of note
issue up to, say, $1e0,o0OOO0. ana more
under a tax provision. 1t should make
loans Only TO its stockholders on good
live bills receivable as collateral or by
re-discounts of paper which they en-
would be absolutely closed and the
operations of the bank confined strict
ly to the commercial field. handling
paper based on staple commodities on
their way to market There would be
no danger then that its resources would
be tied up Indefinitely in unavailable
assets. Its paper would be constant
ly changing, and the bank would al
ways be in shape to help keep bust
ness moving.
The profits of the central institution
should be divided on the plan of say
four or five per cent to the stock
holders, with percentage to surplus
and ther. a division between the
stockholders and the treasury. The
purpose of the bank should not be te
make large profits, but to provide a re.
serve of credit and strength for the
support of the banks and industries o.
the country. 1t would unity the sys.