The Washington times., 1909-10-05
Monetary Commission Plan
Keeps Institution Out of
Politics and Deals.
WHOLE LAND WILL
HAVE VOICE IN IT
No Loans or Discounts Planned.
Only Currency on Saleable
Commercial Paper.

Although the plan has not yet been
worked out in all or its minor details.
il is now possible to give the outline
OF the proposed Central Bank Of the
United States. the establishment OF
which viii be recommended by the
monetary commission to Congress.
II IS 20 be essentially a bankers bank
or agency, TO do business with and for
the other banks IL is not TO receive
deposits from the public nor TO do any
general banking business. It's main
function viii be 10 act as the dscaI
agent OF the Government and. through
its large note-issuing apacity-limited
beyond certain point by taxation-to
come TO the aid Of other banks in times
Of emergency.
Organizing with a capital of, say
S100.ee0.Ooo. the stock is to be appor-
toned 10 the several national hanks.
and perhaps 70 the State banks also, on
the basis Of their capital with a pro-
vision making it impossible for any in
dividual bank TO acquire voting rights in
excess of its quota.
Stockholders Elect.
These stockholders are TO elect :. hoard
OF directors BY territorial districts. IN
would have a representative Of its own
choosing on the board.
There is also 10 be another board,
composed OF Government directors, Of
which the leading officials OF the Treas
Try are 20 be the mt mbers. designated
by The President. the Secretary or tbs
Treasury and the Comptroller OF the
Currency. This affords the joint private
and Government control which has
proved so successful IN the Bank OF
France and the Rank Of Germany
The active officers OF the bank are TO
be selected fer life. or-gOod behavior. by
joint action Of these two boards. This
Is designed 20 eliminate politics and Is
an additional safeguard TO prevent any
syndicate or clique from obtaining undue
control The two boards are 10 cooper
ate IN the management Of the bank.
Jointly deciding questions OF policy and
the like.
All Government moneys are 10 20 into
this bank and it is 70 make Government
dis oursements- Z Is 20 have branches
Ia each city where there Is now a sub
treasury, replacing them, and in such
other cities as necessary 70 give ade-
quate service TO all parts OF the country.
The central bank is to issce its own
notes which. as the present United
states bond-secured national bank cir
cul7tion is retired. are - gradually
supplant them.
Secured by Gold.
CentraFs notes are TO be secured BY
a large gold reserve and by giit-edged
commercial credit or paper representing
an actual transaction in business De-
tween solvent concerns. This viii en-
sure elasticity because the notes to O.
issued By the bank in timFs Of strin-
gency would automatically contract and
be retired from circulation when the
transaction creating the credit had been
completed and the credit paid
No loans are 10 be made, or discounts
accepted, on bonds or stocks. real estate
mortga ges, or any speculative security.
The operations Of the bank are TO %
confined strictly 10 the commercial field.
handling paper based on staple COM
mOdities on their ways 10 market, good,
live bills receivable as collateral. OF re-
discounts Endorsed by the stakeholder
banks.
Although the purpose Of the Central
Bank is not TO make large profits, but
rather TO provide a reserve OF credit
and strength for the support OF the
profits that do accrue are 70 be divided
between the stockholders and the Ma
tiOnal Treasury
Would Solidify Banking.
It is claimed that such an institution
would give the banking system OF the
country an organization and cohesion
that it has always lacked It would be
a bond OF union for ali the banks. great
and small, much like the clearinghouse
associations OF the big cities. and in
stead Of entering into competition with
them, woul1 be a resource FOR each OF
them II Is also claimed that because
il would manage the operations OF the
public treasury the Government re-
Ceipts and disbursements would cease
to be a disturbing factor.
President Taft has already given the
proposition his apprOvdI in general
terms. 1t has the support or the chair
man Of the banking and financial com
mittees Of the House ana Senate. and
il is Endorsed by many OF the bankers
Of the country