The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1909-10-06
GREAT STRUGGLE OVER
CENTRAL BANK is CERTAIN
Continued from PAGE /.


central bank; for. undoubtedly, there is a
great lack of information, even among
bankers, upon this subject.
Mr.. Reynolds is probably a cOmpe tent
authority, and in his Chicago speech he
sought to outline this important project
Here, he pointed out, was to be a bank
of the people and for the people The
people were to be the stockholders, for
anyone would be privileged to buy the
bank stock just as he might a govern
ment bond, "A small interest on such an
investment would be guaranteed by the
government; any earnings more than suf-
uclent to pay the guaranteed interest
would be shared by the government and
by the stockholders. Political control of
the great bank would be made at least
extremely difficult, by the life appoint
ment OF the officers. Integrity of Oper-
alton would be assured by a board of
supervisors, appointed by the President,
the secretary of the treasury and the
comptroller Of the currency Subject to
the approval Of the senate), for alternate
terms of at least eight years. to bridge
over political mutations. Thus would be
met the objections founded upon the his
tory Of the old United States bank, that
the central bank might be prOstituted to
political uses and be made a powerful
engine for the perpetuation in power of
one party. 1t is not intended that the
central bank should support the credit
of the nation; that must stand or fan
by itself. If the national government
than it collects by taxation, it must con-
tinue in the old way to borrow money
from the world at large by the sale OF
bonds.
For the single purpose Of this projected
bank would be to safeguard the business
interests of the people in their private
relations. If there were need for more
money for business purposes, the bank
would supply it by notes, and if there
were a plethora, in dull times, 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would be withdrawn rapidly.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. Perhaps that feature OF
the project would be obnoxious to the ex-
listing banks, but ii is hoped that they
would find their compensation in being
relieved from their present burden of
| carrying the whole weight of response
bility for increases in the circulating me-
dunn to meet sudden demands Of bust
ness. At any rate, there would be no
/ interference with the most profitable fea-
ture of the banking business for the CEN
! trail institution would not receive deposits
/ from individuals.
The question as to how the business
man is to benefit by a central bank IS
sought to be answered by the statement
| that the project included a provision for
! the acceptance of good commercial paper
! as a basis for the issue Of money. Such
paDer would represent actual transac-
| lions between solvent cOncerns-al short
time credits-and sure to be redeemed
/ whenever the transactiOn-the sale and
/ delivery-was concluded. OF course there
would be a reasonable com reserve 90
maintain equilibrium.
Such. in brief is a bare outline Of the
plan. which, with manifold details, prob
! ably will be laid before congress as an
/ accompaniment Of the report or the ma,
/ tiOnal monetary commission. Ihat II VIII
| meet with fierce and prolonged opposition
| cannot be doubted. and this, too, in spite
! of the best efforts of the administrator
to have the matter regarded as non
/ DOTiticaI The mere suggestion OF cen
/ trail bank already has sutficed 70 agltate
| deeply the great banking interests ana
the line of division began to be apparent
at the last bankers convention at Chi-
cago Many of the bank officers regard
/ ed the project with deep suspicion Ihey
we're told that no encrOachment upon their
business was contemplated beyond th9
/ withdrawal from their vaults OF tne sUt-
ernments funds; but they regarded tsS
! measure as the opening wedge Tor the
/ destruction of the most lucrative portion
/ of their business and viewed with any
thing but favor the plan WHEREBY the
| government bank was to enter INTO COLI
petition for the enormous discount opera
lions which gave them very great lnIlu-
/ ence In the industries or the country.
| Possibly their objections can, IN q Hled-
sure be weakened by a recourse 70 SoIiiS
other means of securing basis iOf tHs
! circulating notes of the central Dank tnan
/ commercial paper, such as an ehlaI 80
reserve OF BOld anu s!lFSi, VlCss o..
edged mortgages on real property .Bui
these very suggestions probaoly would
cali forth a new army of enemies to COM
hat the proposition; for not only small
banks, but thousands of wealthy lndiVlJ-
uals. find a large part OF their income
/ in returns from mortgages, WIlle tIle lOch-
ing uD in government vaults or hunoreds
of millions in coin or bullion would arouse
bitter opposition from the advocates OF
the perfectly elastic currency. II may
he that the existing political parties will
be divided on this great question and that
there will be a new alignment IN congress
when it is preached. Indeed, there Is
some reason to believe that ths aul ll4t1
trstion would prefer to wage the battle
on this basis, but the one assured foct is
that in the consideration OF TINS sqDJect
congress in the near future VIII ptunge
! foueht contests It has known since the
DAYS of the "sixteen-to-one" struggle.