New-York tribune., 1909-10-06
CENTRAL BANK PLAN
THE PROJECT EXPLAINED.
It's Relations to G0Uernment-Mighi
Issue ASSET Currency.

. washington, oct 6-Financial legislation will he
one Of the great problems with which Congress
will soon have 20 deal. and foremost among the
projects advanced is the proposed central bank.
II Is believed that il will form the basis of the
legislation 10 be recommended by the Monetary
Commission.
"A bank OF the people and for the people Is mo
definition Of this institution given by George NJ
Reynolds president Of the American Bankers As
soclation. in a recent speech in Chicago. He said
the people would be the stockholders for any one
would be allowed to buy the stock small inter
est the investment would be guaranteed by the
government and any earnings more than sufficient
10 pay the guaranteed interest would be shared by
the government and the stockholders
Political control Of the bank would at least be
made extremely difficult by the life appointment OF
the officers. Integrity of operation would be as
suned by board of supervisors appointed by the
President, the Secretary Of the Treasury and the
Controller Of the Currency subject 20 the approval
of the Senate for terms OF at least eight years
Thus the objections founded the history Of the
old United States Bank that the Central Rank
might be perverted 20 political and he made
a powerful engine for the perpetuation in power OF
one party. would be met.
II is not intended thar a central hank should
support the credit Of the nation. II the govern
nent should need funds it would be compelled as
al present, 10 raise money by the sale of bonds
The sole purpose OF this bank. according to the
views Of fits advocates. would he TO safeguard the
business interests Of the people in their private re-
iations- II more money for business purposes
should he needed the bank would supply it by
notes. and II there should be surplus Of currency
IN 6ull times these notes would be retired rapidly.
Government assistance TO the institution would he
limited 10 depositing in the central hank all gov
eminent funds now national banks. The
tional banks, il hoped would find compensation
for the loss Of the of these funds in being re-
heved from their present burden OF carrying the
whole weight OF responsibility for increases in the
circulating medium. and in the fact that the
tra institution would not receive deposits from in
divduals
q The question as 10 how business are 10 be
benefited by a central bank IS sought 10 he n
swered by the statement that the project included
q provision for the acceptance of good commercial
pepeT a basis for the issue Of banknotes. This
paper would represent actual transactions between
solvent concerns and would be redeemed when the
transaction was concluded. There would be a rea-
Fonable coin reserve
That this plan will meet with strong opposition
in Congress- is regarded certain. At the recent
bankers convention in Chicago many bank aficers
said they regarded the measure the opening
wedge for the destruction of the most profitable
part Of their business, fearing that a central bank
would enter into competition for their enormous
discount operations Possibly their objections
means OF securing basis for circulating notes.
such as an enlarged reserve OF gold and silver,
even gilt edged mortgages On real estate.