The Norfolk weekly news-journal. (Norfolk, Neb.) 1900-19??, 1909-10-15


sion or the monetary system of the
country, according to the treasury sta
ustics produced by George II. Rey.
nolds, president of the American Bank.
ers' association, in the course of his
statement to that body. When the
hrst blast of evil times came in 1907,
the United States treasury held over
one hundred million dollars more gold
than the great national banks of Eng
land, Germany and France combined,
while circulating outside the treasury,
among the national and state banks
and the people was at least twice the
gold treasure held by all of those great
European banks. Yet this vast hoard
in the United States was entirely UNI
available. The credit of the national
government stood unimpaired, but the
business interests of the country were
crippled for lack of the currency
which is their life-blood, and only a
resort to the issue of clearing house
certificates prevented the panic from
assuming greater proportions than it
did.
Congress must meet this situation in
the near future. for the legislation
that was enacted a little over a year
ago was but temporary in it's nature
and must be either supplanted or re-
enacted into permanent law. This
realization of the need for action by
the national legislature has served to
direct attention to various projects
that have been advanced as proper
solutions of the problem, and first and
foremost among them stands the pro-
posed national central bank. The
scheme stands in this relation to 9TH
ers for double reason; it is the com
mon belief that it will form the basis
of the curative legislation to be rec
commended by the monetary commits
sion, and President Taft in his recent
Boston speech, has signified his own
favorable disposition towards the pro-
ject. Consequently, it is timely and
appropriate to disclose to the public
just what is believed to be in the
minds of the president and Senator
Aldrich and the latter's seventeen
colleagues on the monetary commits
sion when they refer to the central
bank; for undoubtedly, there is
great lack of information, even among
bankers, upon this subject.
Mr.. Reynolds again is probably a
competent authority and in his Chi
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 government
bond. A small interest on such an in
vestment would be guaranteed by the
government; any earnings more than
chi inin RI tl,,
terest would be shared by the gov
eminent and by the stockholders. Pc
litical control of the great bank would
be made at least extremely difficult
by the life appointment of the officers.
Integrity of operation would be as.
sured by a board of supervisors. ap-
pointed by the president, the secre-
tary of the treasury and the comp
troller of the currency, (subject to
the approval of the senate), for al
ternate terms of at least eight years
to bridge over political mutations.
Thus would be met the objections
founded upon the history 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
trail bank should support the credit of
the nation; that must stand or fall
by itself. If the national government
needs funds; if it spends more money
than it collects by taxation it must
continue in the old way to borrow
money from the world at large by the
sale of bonds.
For the single purpose of this pro-
tod hn l. a h1 L.,
of the business interests of The PEG.
pie in their private relations If there
were need for more money for bust
ness purposes, the bank would sup.
ply 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. Per.
haps that feature of the project would
be obnoxious to the existing banks,
but it Is hoped that they would find
their compensation In being relieved
from their present burden of carrying
the whole weight of responsibility for
increased in the circulating medium to
meet sudden demands of business. At
any rate, tneTe would De no lnleT1er-
ence with the most profitable feature
of the banking business for the central
institution would not receive deposits
from individuals.
The question as to how the business
man is to benefit by central bank
is sought to be answered by the state
ment that the project included a pro
vision for the acceptance of good COM
mercial paper as basis for the is
sue of money. Such paper would rep
resent actual transactions between
solvent concerns-all short-time cred
its-and sure to be redeemed when
ever the transaction-the sale and de-
livery-was concluded. OF course,
there would be a reasonable coin re-
serve to maintain equilibrium.
Such. in brief, is bare outline of
the plan, which with manifold details,
probably will be laid before congress,
as an accompaniment of the report of
the national monetary commission.
That it will meet with fairest and pro-
longed opposition, cannot be doubted
and this, too, in spite of the best eff
forts of the administration, to have
tho Tnattar rauo t,1a1 nnn.nplifinal