Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1909-12-10
THE CENTRAL BANK.

The discussion of the proposed
the suggestion of Central bank, rem
ders interesting some particulars
with reference to foreign banking
systems and central banks. The New
York Evening Post has been making
some independent investigations with
reference to the subject, and while it
is agreed that none of the foreign
systems is applicable to this country's
business, the more information we
gain on the general subject the bet
ter we will be equipped to legislate
wisely. OF the Bank of England, the
central bank Of Great Britain, the
Posts correspondent says:
In any consideration of the posi-
bflity Of adopting features of the Eu-
ropean banking and credit system to
our needs this psychological factor
of confidence always must be consid-
cred. Before any account is given of
the relations existing between the
Bank of England and the government
and between the bank and the other
bankers of Great Britain, it is not
only desirable but necessary to lay
emphasis upon the high regard in
which the central bank is held by
the whole country, how it is looked
up to by the other bankers, and how
it is depended upon in the gravest
crises to do what should be done.
Most important of all, when the bank
does take action it's decision is not
questioned by the other banks, by the
customers Of banks, or by the fnan-
cial houses. It can always count up
on, and always receive, the unques-
tioning support in every element of
the business and finance Of the coun-
try.
A. deposit in the Bank Of England
is regarded as so much gold. All Of
the other banks in Great Britain,
with one exception, make practice
of setting down leash in hand and at
the Bank Of England" as one item
in their balance sheets, as if there
was no difference between the actual
holding of gold and a balance at the
Bank of England. The other bank
ers never separate the two parts of
this item, but it is known they keep
only small actual cash balance in
their own strong boxes, and that the
bulk of their available cash resourc-
es is in the form of credits on the
books of the Bank of England. The
bank itself makes no separate return
of the amount of bankers balance it
holds, but it is believed to average
about 100000. This, however, is
only an estimate of financial men in
the city, based on their knowledge of
the practice of the other banks and
the general monetary position.
So great is the prestige of the bank
of England in Great Britain that it
is enabled to communicate it to other
banks, which keep deposits with it.
Practically all of the English, Scotch,
and Irish banks do keep an account
with it. 1t is thought to confer a
distinction upon merchant or bill
broker who Is admitted as depositor
of the bank. There is firm convic-
ton throughout the country that the
government is behind the bank, and
that the bank in its turn is behind
the other banks, so that one of the
chief requirements of any banking
system, the full appreciation and con-
fidence of the public, is insured to a
really remarkable degree.
The supreme control of the affairs
Of the bank rests with the governor,
deputy governor, and court of TWEEN
ty.four directors, who are elected an
nually by the stockh holders, 1t Is GUS
tomary for a governor and deputy
governor at the close Other first
year of office togbe re-e4ected for a
further term of one year. and a dep
uty governor is usually elected 70 the
Office of governor pn he completion
Of two years. tenure u the second
The bank is divided into two great
DEPARTMENTS: That under: the chief
accountant, who Is responsible TOR
this management Of the stocks form
Ing the national debt and other reg
istered stocks-home, Indian, colon
iai, atr. He also keeps the banks
own accounts That under the chief
cashier, WHO has charge Of the issue
and payment OF notes and ali bank
ing business, such as drawing ac-
counts. loans, discounts, and all
other matters involving dealings in
cash.
III actual practice the selection Of
directors is confined to those who
are, or. have been. members Of mer-
camille or financial houses, excluding
bankers, brokers, bill discounters. or
directors Of other banks In the United