The citizen. (Honesdale, Pa.) 1908-1914, 1909-10-15
What a Central U. s. Bank Means.

Tie pTOpOSeu CeuITdl DdUh Ol lie
United States, the establishment of
which will be recommended by the
monetary committee to congress.
According to information reaching
the United Press from authentic
sources, it is to be essentially a bank
ers bank or agency to do business
with and for the other banks. 1t is
not to receive deposits from the pub
lie nor do any general banking busi-
ness. Its main function will be to
act as the fiscal agent of the govern
ment and through it's large note is
suing capacity-limited beyond a GER
tain point by taxation-to come to
the other banks in times of emer-
gency.
Organizing with a capital of say
$100,000,000 the stock is to be ap-
portioned among the several nation
al banks and perhaps to state banks
also on the basis of their capital
with a provision prohibiting any in
dividual bank from acquiring rights
in excess of its quota.
These stockholders are to elect a
board of directors by territorial dis
tricts. BY this way it is claimed by
advocates of the measure, every sec
tion of the country would have rep
resentative of it's own choosing on
the board. There is also to be an
other board composed of govern
ment directors of which the leading
officials designated by the President,
the Secretary of the Treasury and
the Comptroller of the Currency.
This is designed to afford the point
private and government control
which it is alleged has contributed
SO largely to the successful operation
of the banks of France and Ger
many. The active officers of the
bank are to be selected for life, or
good behavior by joint action of these
two boards.
The professed purpose of this
provision is to eliminate politics for
private profit.
Much of the opposition to the
Central bank arises from the men,
ory of the disasters which befell the
old bank of the United States" con-
ceived by Alexander Hamilton and
killed by Andrew Jackson. 1t is
feared by many that the new organi-
zation in its Development would be
but a repetition of the old. The
old bank of the United States was
corporation organized for private
profit. According to it's charter the
government was minority stock
holder having only $7,0OO,O0O out
of total of $35, 100000 of stock.
The government had only five out of
twenty-five directors and they work.
ed as one body so that the govern
ment could be outvoted.
The old bank did business just as
any bank does to-day, accepting the
peoples deposits and making loans
and discounts to the public. 1t
worked as a private organization and
for time was successful despite
frauds in the sale of stock which was
taken by the people and occasional
bad management.
At the beginning of Jackson's ad-
it's capital was about
quarter and it's loans, circulation and
deposits about one-fifth of
and deposits and about one-fifth of
the whole amount held and issued
by all the banks of the country. Its
parent office was in Philadelphia
and it had twenty-five branches
through the south. It's banks notes
we're as good as gold in any part of |
he United States and were accepted |
abroad within a fraction of their |
ialue at home according to the cur
'ent rates of the exchange.
Later tales began to come to Jack
son of the corrupt influence the bank |
vas exerting in controlling elections
Ind he came to believe that it was
dangerous institution. So he vetoed |
he proposed extension of it's char
er, withdrew from it all deposits of
government money, scattered them
Imong state and private banks of his I
'wn choosing and when the panic
# 1887 came, most of those banks
allied and good portion of the gov
funds were lost.
In the meantime the withdrawal
# the government charter and funds
aused the bank of the United States
o fail bringing widespread loss to
he people who had funds on deposit
nd who had invested in its stock
ecause of the government backing
had. Under the proposed central
ank, so its advocates claim, none of
heSe things could occur
But the general public is admitted
Y skeptical. The fear has been
reely expressed that the Central
ank would mean a concentration of
he money power and that Wall street
1ould soon be in control of the cur
ency of the country despite any
afeguards Congress may throw about
uch an institution.
1t is claimed by the advocates of
his scheme that such an institution
1ould give the banking system of the
ountry cohesion that it has always
acked; that it would be a bond of