The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1909-10-09

congress must meet a situation horn
Of the panic of 1907 when the issue
of clearing house by the government
to supply sufficient currency to m, ct
the demands of the business interests
of the country was necessary. al
though Americas Golfers were over
flowing with gold.
First among the various projects
that have been advanced as a proper
solution of the governments problem
stands the proposed national central
bank.
AS 1t Is the common belief that It
will form the basis of the curative
legislation to be recommended by the
monetary commission and as Presi-
dent Taft in his recent Boston speech
signified his own favorable disposition
towards the project, it is timely to
disclose to the public what is believ.
ed to be In the minds Of the president
and the Is members Of the monetary
commission when they refer to the
central bank.
"A bank Of the people and FOR the
people" Is the definition Of this in
stitution made by George H. Rey-
nolds, president of the American
Bankers Association, in his Chicago
speech. He pointed out that the peo-
pie were to be the stockholders, for
any one would be privileged to buy
the bank stock just as he might buy
government bonds.
A small interest on such an in
vestment would be guaranteed by the
government; any earnings more than
sufficient to pay the guaranteed in
terest would be shared by the govern
ment and by the stockholders.
Political control of the great bank
would be made extremely difficult by
the life appointment of the officers.
Integrity Of operation would be as.
sured by board of supervisors, ap-
pointed by the president, the secre-
tary Of the currency (subject to the
approval Of the senate) for alternate
terms of at least eight years to
bridge over political mutations.
1t Is not intended that the central
bank should support the credit of the
nation. If the national government
needs funds. 1t must continue to bor-
row money by sale Of bonds.
The single purpose OF the bank
would be to safeguard the business
interests of the people in their pri-
vate relations. II there were need for
more money for business purposes the
bank would supply it by notes and II
there were a plethora in dull times
these notes would be withdrawn rap.
idly.
Government assistance to the in
stitution would be limited to the de-
posit with the central bank of gov
ernment funds now in national banks.
There would be no interference with
the most profitable feature of the
banking business. for the central in
stitution would not receive deposits
from individuals.
The question as to how the busi-
ness man is to benefit by a central
bank Is said to be answered by the
statement that the project will in
clude a provision for the acceptance
OF good commercial paper as a basis
for the issue of money, such paper to
represent actual transactions between
solvent concerns-all short time cred
its-and sure to be redeemed when
ever the transaction, the sale and de-
livery, is concluded.
Such. In brief. is bare outline of
the plan which, with manifold de-
tails probably will be laid before con-
gress, as an accompaniment Of the
report Of the national monetary COM
mission. That it will meet with op-
position can not be doubted and this.
too, in spite Of the best efforts of the
administration to have the matter re-
garded as nOn-political.
The suggestion of a central bank
already has agitated deeply the great
banking interests, the line Of division
beginning at the last bankers con-
vention in Chicago. Many of the
bank officers regarded the proposition
with deep suspicion.
They were told that no encroach-
ment upon their business was con-
templated beyond the withdrawal
from their vaults of the governments
funds. but they regarded the measure
as the opening wedge for the destruc-
tion of the most lucrative portion of
their business and viewed with any,
h.