The Norfolk weekly news-journal. (Norfolk, Neb.) 1900-19??, 1908-04-24

Our gold stock is subject TO In.
crease or decrease and is really the
most responsive element in our cur.
rency. We saw 100000 200 brought
to this country last fail aud It brought
great relief but an immense amount
of damage had been done before II
could be had. A gold movement is
not readily responsive TO business
needs; you must take the gold away
from somebody else, and conditions
abroad are TO he reckoned with. you
must pay for every dollars worth YOU
get, by some means and in a crisis you
usually pay at heavy sacrifice. II
costs this country millions Of dollars
in premiums and In lower prices for
its products to bring the gold last fall,
to say nothing of the injury done to
our industries and business by the
crisis.
Compare the importation of that
S100,000.000 of gold by our bankers
In two months with the action Of the
Imperial Bank of Germany in increas-
ing its note circulation 1914 900 600 in
one week during the same period with
no disturbance whatever, except an
advance in the interest. rate, and you
will have a clear showing of the ad-
vantage of their system over ours. In
Germany and In most other countries,
an elastic element in the currency is
supplied by credit; by true credit notes
based upon the very commodities
whose movement requires the cur
rency.
And do you realize that the trouble
last fall was occasioned by a want OF
currency for only an insignificant part
OF our total payments? Money nova
days is only the small change of the
business world. 1t has been estimated
that ninety per cent of the exchanges
OF this country are settled without the
use of money; so this whole currency
question that we hear so much about
has to do only with the remaining ten
per cent.
System Of Note Issues Defective.
In the national banking system we
have thought of nothing but making
the notes safe, and we have so hamp-
cred and restricted their issue, and
made 1t so inconvenient and costly.
that we have robbed the function of
all responsiveness and nearly destroy
ed its usefulness. We make the notes
a permanent currency. We treat them
as real money, instead of a temporary
credit instrument like the check and
draft.
The Central Bank.
The currency system to which | be-
lieve this country must ultimately
come is that of the central bank. 1t
ig hr % s,L
important country in the world has al
ready come. Instead of scattering the
note issuing function among numerous
small institutions, it centralizes it in
one great strong semi-official institu-
ton, Immediately under the supervis-
ion of the government, and what per-
haps is more important under the
scrutiny of the whole financial world.
The capital of the Imperial Bank of
Germany is 1S0,000,000 marks all paid
in by private shareholders. The Off
cial head of the bank Is the chancellor
or prime minister of the empire. The
active manager of the bank is appoint.
ed by the chancellor. There is
board of directors appointed by the
emperor, and another board elected by
the shareholders, and these boards,
through their committees share in the
direction of the bank.
AS in the case of the Bank of France
the directors representing the share
holders are interested in practical bust
ness management; they want the ex-
penses kept down, they want the loans
carefully made on business principles,
they want dividends on the stock. On
the other hand the representatives of
the government are there to see that
the bank is conducted upon broad lines
with proper regard for general pub
lie interests. There is no legal limit
to its right to issue notes except that
it must always have coin or gold bull
lion to an amount equal to one-third
of the outstanding circulation, and
above certain fixed limit it must
pay tax at the rate of five per cent
per annum. Subject to these restric-
tions the bank is free to issue its notes
as 1t may deem advisable for the in
terests of German industry and COM
merce.
The profits of the imperial bank are
divided by first giving the Stockhold
ers three and one-half per cent, after
which one-third goes to the stockhold-
ers and two thirds into the public
treasury.
They sometimes have tight money
in Germany, and high interest rates
But the country never comes up to
the limit of its resources. There is al
ways some reserve power, and high
interest rates always bring about a
contraction of credits within a reason
able time.
Objections to Central Bank.
The objections to a central bank
whenever one has been proposed for
this country, have always been:
First-That we have had two expert
ments with such an institution; that
it became involved in politics and pro-
badly would again;
Second-That it would be monopo-
listic in character and probably fall
into the hands of a few people who
would use its great power to promote
| their own interests, and;
Third-That we have developed a