The Oskaloosa herald., 1909-10-07
CENTRAL BANK
IS CONTEMPT
VIII Form a Basis of Curative
Legislation.
TAFT FAvoRs THE PROJECT
That Plan VIII Meet with Much OPP
position When Laid Before
Congress Cannot Be
Doubted.

| Washington, Oct. 6.-The coming
| congress must meet a situation born
of the panic of 1907, when the issue
of clearing house certificates by the
government to supply sufficient cur
rency to meet the demands OF the
| business interests of the country was
necessary although Americas cor
| fers were overfiowing with gold. The
temporary legislation enacted during
| that critical period must be either
supplanted or re-enacted into perma-
nent law and foremost among the
various projects that have been ad-
vanced as a proper. solution OF the
governments problem stands the pro-
posed National Central bank.
Taft Favors Project.
| AS 1t is the common belief that II
will form the basis of the curative
| legislation to be recommended by the
monetary commission and because
President Taft in his recent Boston
speech, signified his own favorable
| disposition toward the project, it is
| timely to disclose to the public what
| Is believed to be in the minds Of the
president and the Is members OF the
monetary commission when they re-
fer to the Central bank.
"a bank of the people and for the
! people" is the definition of this in
stitution made by George II. Rey-
nolds, president of the American Bank
ers' association, in his Chicago speech.
He pointed out that the people were
| to be the stockholders, for anyone
would be privileged to buy the bank
stock just as he might government
bond. A small interest on such an
| investment would be guaranteed by
the government; any earnings more
than sufficient to pay the guaranteed
interest would be shared by the gov
eminent and by the stockholders. Po-
| litical control of the great bank
would be made at least extremely
difficult, by the life appointment of
the officers. Integrity of operation
would be assured by a board of SUI
pervisors, appointed by the president,
the secretary of the treasury and the
comptroller of the currency, (subject
to the approval of the senate) for al
! ternate 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 powerful engine
! for the perpetuation in power of one
party 1t is not intended that the
! Central bank should support the
! credit of the nation. If the national
government needs funds; if it spends
more money than it collects by tax
alton, it must continue in the old
way TO borrow money from the world
at large by the sale of bonds.
Safeguards Business Interests.
For the single purpose of this
! projected bank would be to safe.
guard the business interests of the
people in their private relations. If
there were need for more money for
| business purposes, the bank would
supply it by notes, and IL there were
! a plethora, in dull times these 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. The
existing banks, it is hoped, would
| find their compensation for the loss
of these funds in being relieved from
| their present burden of carrying the
whole weight of responsibility for in
! creases in the circulating medium,
and in the fact that the central in
| stitution would not receive deposits
from individuals.
Basis for Money Issue.
The question as to how the bust
ness man is to benefit by central
| bank is sought to be answered by the
statement that the project included a
| provision for the acceptance of good
| commercial paper as a basis for the
issue of money Such paper would
represent actual transactions between
solvent concerns-all short-time cred
| its-and sure to be redeemed when
ever the transaction was concluded.
There would be a reasonable coin re-
serve to maintain equilibrium.
That this plan will meet with pro
longed opposition when laid before
] congress cannot be doubted, although
the administration desires to have the
| matter regarded as non-Doljtical