The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1909-10-06
CENTRAL BANK
IS A NECESSITY

~ IA lNLSAOOG Il
Washington. Oct. 5.-Onc eloquent
fact-that with Golfers OverflowinS
with gold. America was Obliged to ap
pcnl 10 Europe for relief in the panic
of 19o7-is a strong point of the aTgu
ment that will be made TO congress
by the advocates OF a revision OF the
monetary system of the country. Ac
cordinG TO the treasury statistics pro-
duced by George H. Reynolds. presi-
dent of the American Bankers Asso-
ciation. in the course Of his statement
TO that body. when the first 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 England. Ger
many and France combined. while cir
culating outside the treasury among
the national and state banks aud the
people was at least twice the gold
| treasure hold by all Of those great Eu-
| ropean banks. Yet this vast hoard In
the United States was entirely un-
available The credit of the national
| government stood unimpaired. but tho
business interests of the country were
| crippled for lack of currency which IS
their llfe-blood. and only a resort to
| the issue of clearing house certificates
prevented the panic from assuming
greater proportions than II did.
Only Temporary Relief,
Congress must meet this situation
! in the near future, for the legislation
J that was enacted little over year
| ago was but temporary in its nature
and must he either supplanted or re-
enacted into permanent law. This
| realization OF the need for action by
the national legislature has served to
| direct attention 10 various projects
that have been advanced as proper So
lutions 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; IL is the com
mon belief that 1t will form the ba-
sis of the curative legislation to be
recommended by the monetary com
mission and President Taft in his re-
cent Boston speech, has signified his
own favorable dispo2ltion towards the
project Consequently, II is timely
and appropriate 10 disclose 10 the pub
lie lust what Is believed TO be in the
minds OF the President and Senator
| Aldrich and the latter's secentee1 col
leagues on the monetd.y commission
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 q
competent authority, and in his Chi,
cagoespeech he sought TO outline this
important project Here he pointed
out, was 10 be bank Of the people
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 hond. A
small interest on such an investment
would be guaranteed by the govern
ment; any earnings moro than sufl'
Client TO pay the guaranteed interest
would be shared by the government
and by the stockholders. Political
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, 7p-
pointed by the president. the secrc-
tary Of the treasury and the comptrol-
ler of the currency (subject to the
approval os the senate), for alternate
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 per
petuaton In power of one party. 1t
Is not intended that the Central bank
should support the credit of the ma
tion: that must stand OF fall by Itself
II the national government needs
funds; II II spends more money than
II collects BY taxation. " must con-
tinue In the old way to borrow money
from the world at large by the sale Of
bonds
An Elastic System.
For the single purpose Of this pro
jected bank would be the safeguard
Of the business interests of the peo-
pie In their private relations. II there
were need for more money for busi
ness PURPOSES. the bank would supply
IL by notes and If there were pie
thora, In dull times, those 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 1t is hoped that they would find
their compensation in being relieved
from their present burden OF carrying
tho whole weight Of responsibility for
increases In the circulating medium
to meet sudden demands Of business.
| At any rate, there would be no inter
ference with the most profitable feat
ure of the banking business for the
central Institution would not receive