The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1909-10-06
COMING CONGRESS-
MUST MEET ISSUE
Financial Prob EN- Must Be
DeciSiveIy Solved
CENTRAL BANK PLANNED
Single Purpose of Projected Bank
Would Be to Safeguard the
Interests of People in
Private Relations.
CENTRAL BANK PLANNED

Washington, October 5-The coming
Congress must meet a situation born of
the panic of 1907. when the issue of clear
ing house certificates by the government
TO supply sufficient currency to meet the
demands of the business interests of the
country was necessary, although Amer
tcas Golfers were overlooking with gold.
The temporary Legislation enacted dur
ing that critical period must either be sup
planted or. enacted into permanent law,
and foremost among the various projects
that have been advanced as a proper So
luton of the government problem stands
the proposed national central bank
1t Is the common belief that it will form
the basis of the curative legislation to be
recommended by the monetary commits
sion, as President Taft in his recent Bos-
ton speech, signified his own favorable
disposition toward the project
"A bank of the people and for the peo-
pie" is the definition of this institution,
made by George NJ. Reynolds, president
of the American Bankers association. in
his Chicago speech. He pointed out that
the people were to be the stockholders.
for any one would be privileged to buy
the bank stock just as he might a gov
eminent bond.
Political control of the great barA would
be made at least extremely difficult by the
life appointment of the officers. Intes-
rity of operation would be assured by a
board of supervisors, appointed by the
President, the Secretary of the Treasury
and the of
ject to the approval of the Senate, for
alternate terms of at least eight years to
bridge over political mutation. Thus
would be met the objections founded
upon 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 party.
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 1t by notes, and If there
were plethora in dull times these notes
would be withdrawn rapiy. Governmental
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 hnd thfer compensation for
the loss of these funds in being relieved
from their present burden of carrying the
whole weight of responsibility for in
creased circulating medium, and in the
fact that the central institution would not
receive deposits from Individuals.
As to how the business man is to
benefit by central bank, the statement
is made that the project includes a pro-
vision for acceptance of good commercial
paper as basis for the issue of money,
Such paper would represent actual trans
actions between solvent concerns-alI
short time credits-and sure to be re-
deemed whenever the transaction was
concluded. There would be a reasonable
coin reserve to MAINTAIN equilibrium
That this plan will meet with prolonged
opposition when laid before Congress can
not be doubted although the administra-
ton desires to have the matter regarded
as non-political.
At the recent bankers convention in
Chicago many of the bank officers re-
garded the measure as the opening wedge
for the destruction of the most lucrative
portion of their business, and viewed with
disfavor the plan whereby the govern
ment bank was to enter into competition
for the enormous discount operations
which gave them great influence in the
industries of the country.