The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1909-02-18

We do not believe Mr. Taft can be real
happy in the White House. however. IN
less he IS able TO secure early in the
game a thoroughly Trustworthy proxy to
relieve him OF his globe-trotting habits.
Mr.. MOrswetz on the Currency Problem.
a timely contribution TO current inaH-
ciaI discussion. in view OF the reported
conversion Of the most influential MEM
Der OF the monetary commission 10 the
central bank idea. has been made by
Victor .Morawetz. Of New York, who. IN
a little book on The Banking and
Currency Problem in the United States.
has taken strong ground against the
establishment Of central bank IS a
remedy for the evils Of our present bank
note system. Mr.. Morawetz accepts the
traditional belief that central bank OF
issue is a political impossibility. though
OF that lie thinks the members Of Con-
gess the best judges. A central bank
would have 70 be OF colossal proportions,
and enjoy a monopoly Of the note-issuing
power Mr.. Norawetz does not think
the people Of This country would consent
TO the creation OF such a bank, or that
they can be convinced that it would be
safe 10 give to any set Of men the power
10 control lis vast resources anS 10
dominate the banking interests Of the
country Even If II were practicable 10
obtain the necessary legislation. Mr.. Nor
awetz believes Il would be undesirable
TO establish such a bank He points out
some reasons why.
The practical control Of srch q bank. as IN the
case q eFeTy successful institution q that kind
would soon pass into the hands q enc man or Il
small number q men Although to-day the best
man OF set Of men would be in control there
would always be danger that control might pass
into undesirable hands And even though pro
vision could be made 30 that the control q such -
baEk always would remain in the hands of the
wisss-. the most honorable. and the most disin-
teTesJed men, II would BE- possible 20 satisfy the
people throughout the country that tire vast r.
sources and powers q she bank were used only for
the best interests 4 all the people. and without
psrtiaiitv o. favor to ans section n the c1unfrJ
O 10 any class or SCI q Ucupie The admiuisrra-
ton q such a bank would be the sCurcc q erd-
les sectional Differences and dissensious and soon
r would become political Issue. The S0gth would
want the bank. b means q loans. % help the
planters % accumulate and 20 carry their crops Z
c0-t0n and tobacco so as 70 force higher p-css
The West would vsnt the bark ia use us resources
TO enable the farmers - False the price = CON
ard wheat The large mcney cenfers would want
the hank 70 help bankers and brokers 10 czrr
stocks and bonds when speculation r1ns high AZ the
stock exchanges Claims would be made. on the
one hand. that the bank was unduly fsvo-iug the
co7nrry banks. md. on the othcr hand thar Il
vas und1Iy fa707inE the hanks IN the large critics
In every period Il stringsncy and q high interest
rates an cutter world come from every par5 a tie
county that th- central bank should relieve the
situation; and Il the managers Of the bank should
deem Z Unsafe 70 yield 20 this outcry b. expand
inz credits stiE further their refusal 70 ac- Wild
be charged 70 selfish motiTes n 70 collision Win
waH street
ar Morawetz's criticism Of the central
bank idea loses none Of its force be-
cause his objections represent the situs-
ton which arose under the administra-
ton OF the old United States Bank. OF
because the complaints he thinks would
Be heard are paraphrases OF those actu-
ally made concerning the administration
OF the Treasury Department during re-
cert financial crises. Mt. Yforawetz dis
misses the central bank scheme as out
OF harmony with our business habits and
our political methods. We.must sacrifice
some OF the advantages OF Capitalization
10 preserve our political institutions. But
when he comes 10 presenting a currency
scheme Of his own he proposes cenualiza-
ton in another, though possibly less OBJ
noxious, form. He would establish a
central agency to control the volume OF
uncovered banknctes. This agency would
be composed Of the Secretary OF the
Treasury and managing committee %
fifteen or more elected by the banks,
which would form an association for this
purpose. Each hank would have the
right 10 issue notes Up 10 an amount
which. including its present bond-secured
iiylrS. NyLtQ isoL exceed US CdNlLdl SUCK
The managing committee would. from
time 10 time, tx the authorized limit OF
banknote expansion. and. by regulating
the volume Of uncovered notes outstand-
Ing, would control the credit situation
and give stability 10 financial conditions
generally The Fowler plan proposed
10 decenralize this control Of note issues.
but Mr. Morawetz insists that our fnan-
ciaI troubles have been Que 70 the alb
sence Of central regulation Of the credit
situation, and that there must be a cen
trsl power 10 provide for unexpected cur
rency demands. His scheme differs. also.
from that OF the Aldrich-vreeland biz.
which provides for currency. associations
grouping together the banks Of cities. or
contiguous territory. It would centraIize
bank control Of the national currency 10
an extent hitherto avoided by our legis-
lators.
Perhaps those jurors IN the Carmack
murder case who can neither read nor