The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-10-06
BIG CENTRAL BANK.
To Be the Main Feature of Proposed
Monetary Reform.

washington, Oct. 6.-The coming con-
-raas must meet a situation born OF
the manic of 1907, when the lssue VI
clearing house certificates by the gov
ernment to supply sufficient currency
10 meet the demands of the business
interests of the country was necessary
TsTe Temporary legislation enacted our
ing that critical period must pc eIl nS.
xu2nIanted or reenacted into pernan-
emf law and foremost among the Narl,
Gus projects that have peen auNdnceu
IS a proper solution OF the govern
rIent's problem STANDS the pop00eU
rational central bank
IT is the common belief that 1t VIII
form the basis of the curative IesIsIa-
+ion to be recommended by Inc InonS
tary commission and President da5e III
TiSs recent Boston speech. Signined MS
own favorable disposition toward tue
project. - for the
people, is the definition OF tnls IIH9
fufiou made by George M Reynolus'
president of the American Bankers
ISOLATION, in his Chicago speech y
pointed out that the people WEI 70
the stockholders, for any one Moui ,
he privileged to buy the bank StocA
inst as he might a government polIu'
A small interest on sucn an AAse
ment would be guaranteed oy IN suf
errment; any earnings more tnan SUI.
dcient to pay the guaranteed lnteress
would be shared by the government anu
nv the stockholders. Political coulrol
of the great bank would pc H 1sea
least Extremely difficult by the life ap.
pointnnent of the officers. INTEGRITY VI
operation would be assured by a ooaIo
of SUPERVISORS appointed by the presl
dent. the secretary OF the treasury fs nh
iect to the approval of the sena1el III
oIferna+e terms of at least eight years
To bridge over political mutations.
Purpose of the Bank.
Thus would be met the objections
founded upon the history OF the oIo
tinted states bank, that the central
hank might be prostituted to political
uses and be made powerful englne
of perpetuation in power OF one party.
II is not intended that the central bank
shoT1Id support the credit OF the ma
fion. If the national government
needs funds it must continue IN the
old way to borrow money from the
world at large by the sale OF oonas.
The single purpose of this projected
hank would be to safeguard the bust
ness interests of the people In their
nrivate relations. If there were neeo
FOR more money for business purposes
The bank would supply it by notes, and
ff there were a plethora, these notes
would be withdrawn rapidly. Govern
mental assistance to the institution
would be limited to the deposit with
the central bank of all government
funds now in the national banks. The
existing banks, it is hoped, would ind
their Compensation for the loss or
these 1unQS III D6lIS ICACNCQ
CARRYING the whole weight of respon-
sibilitv for increases in the circulating
medium, and in the fact that the CEN
trail institution would not receive de-
posits from individuals.
The question as to how the business
man is to benefit by a central bank Is
sought to be answered by the state
rnent that the project includes a pro-
vision for the acceptance of good COM
Inercial paper as a basis for the issue
of money
Much Opposition Looked For.
such paper would represent actual
transaction between solvent concerns
all short time credits-and sure to be
redeemed whenever the transaction
was concluded.
That this plan will meet with pro-
longed opposition when laid before
congress can not be doubted, although
the administration desires to have the
matter regarded as nonpoliticaL
At the last bankers convention at