The morning journal-courier., 1908-12-08
URGES NATIONAL
 CLEARING HOUSE
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 greatly depend upon your generous support and co-opcratiou"
 Taking up then the question of "as- set currency Mr. Treat said that the old time View that banks ought to s- sue money. directly had passed away probably never to return and that the broader view is now taken that the nation in Its sovereign right should control all the Issuance of money, whether coin or paper for tho benefit of the whole people not only in fduciary way but for all the benefits accrung to the nation at large, Tho profits of banking now depend on deposits rather than on circulating bank notes" The issue of gold certificates by the govern. mcnt was next discussed by Treasurer Treat who pointed out that these ccr- tficatcs preferable 10 gold coin itself were not only acceptable at home but much desired abroad and he said;
 "T have long been of the opinion that there should be an enlargement of the plan under which this government is- sues gold certificates, In that Ave of the largest and wealthest commercial na- tions Join in an international associa- tion whereby the bankers of each na- tIon could deposit their gold and re- colvc gold certificates therefor The gold SO deposited should he sacredly safoeuardcd as a trust fund and sa- questcred from all monetary transac- tions of the nations the same as now obtains in this country This would not only promote facility and economy In international exchanges hut lt would save m enormous amount of time and great experience. as well as the ahra- sion or wear that the coin now under goes when shipped from one financial center to another" Mir Treat further argued for the issue of gold certificates in denominations as low as nvc dollars
 Speaking of postal savings banks Mir Treat expressed doubt whether in fact such banks would be In any great way iuimi7al to the present organized say ings banks, who he said pay dcpositors ' ' to the 2 per cent of the government There Is strong protest. said he, against tho Invasion by tho govern ment. in further extending It's author- Iity over tho monetary affairs of tho country, but as the government was made for the people and not the people for the government, and benefits can arise from this source better than in any other Way why should not the people have that benefit" The cstah-
 ishment of a national clearing house bank was next discussed hy Mir Treat in connection with the recent agitation for a guarantee of bank deposits that iis a hank whose shares would ho owned entirely by hanks and whose manage ment would devolve upon them aa i shareholders therein This would not 1 he a government hank in the sense 1 that the government would he an ln- yeetor in its shares, but f would ne 1 under tho charter nf the national gov ornmont much in the wa, way as om i present national banking system Its capltal shall not he less than S2nn0Oo on0 1 and moi moro than ss0n nn0 n0n with shares ot $500 each The idea put forth l by Mir Treat included tho suggestions 1 that tho shareholders might he either from tho banking members of clearing houses or from individual banks. that any national hank bo permitted to ln- vest not exceeding 20 DOT cent of Its capital in the shares of tho bank, that It's directors he chosen from the mem berghir of the groups of clearing house 1 banks and other provisions for its gov ernment Including the rroviso that tho 1 United States government shall have l nn participation or dictation in lts management regulation and supervls- ] ion He further suggested that national 1 banks he permitted to re discount their commercial paper with the national clearing house bank not to exceed t0t per cent of fits capital and surplus i Developing his Idea of the details of tho national clearing house bank NIT Treat said
 "The National Clearing House bank shall he government depository It shall be authorized to deal in foreign exchange tt shall he authorized to act as reserve agent for any bank with which lt does business. II shall further he authorized to discount the commet cial notes taken by other banks, and for banks alone lt shall he permitted to discount such notes at rate not .exrceding { per cont per annum, and to make an advance thereon not cx- ceeding 75 per cent of the face value, The balance to remain on deposit uu- til said notes have maturcd and been paid, This should afford earning power to insure a fair interest rate on tho stock
 Tn times of financial distress, the secretary of the treasury shall he au- thorl2ed to receive as collateral for the issue of national bank currency to this national clearing house bank, such commercial notes discounted by the na- tional clearing house bank. and guar anteed by it and the previous discount ing bank, to an amount not exceeding 1J per cent of the face value of said loans. at rate of not more than 2 per cent interest per annum The
 limit of credit not to exceed six months on payment of tho notes discounted for inc national clearing house bank the 25 per cent, balance withheld to be repaid tn the bank, This form of sc- curity is admitted as a safe basis for
 issuance of currency by France and Germany
 This plan would give all the func- tons and advantages of great cen tral bank without adding to the con fusion of another diotation or con- troll" Mr. Treat expressed tho opin- ion that this plan provided a much more simple and direct method than the Aldrich-Nreeland bill and one more in the line of banking, He said ti,,t hoJ u.np fbn gorJto1