The Vinita daily chieftain. [volume] (Vinita, Indian Territory [Okla.]) 1902-1913, 1910-03-11
BY Associated Press.

Washington, Mar. 11.-Both advo
Gates and opponents of the central
bank idea, recently brought into pub
lie discussion in this country by
speeches of President Taft, will find
material for study and argument in
the monograph on ''The National Bank
lof Belgium" by Charles A. Conant
the well-known banker and author OF
"a History of Modern Banks of Is.
sue" and other financial works. This
monograph by Mr.. Conant will be is.
sued today by the National None.
tary Commission as the latest of the
series embodying the product of the
exhaustive investigation Of the Nation
al Monetary Commission.
The National Bank of Belgium dates
only from the year 1850, twenty years
after Belgium became an independent
state, and was afterwards made the
model of the revision of the charter
/ of the Bank of the Netherlands and
the National Bank Of Japan, when
Japan abandoned her unsuccessful ex-
pertinent with the American system of
isolated banks issuing notes on public
securities. The foundation of the Ma
tional Bank of Belgium followed the
collapse of the system of issuing bank
notes through banks which engaged
largely in financing instead of basing
their issues upon liquid assets. The
errors of previous banking expert
ments were thus avoided in the en-
actment of the charter of the National
Bank and, as Mr.. Conant declares, the
| institution bears the stamp of two or
three characteristics which are re-
garded by many economic students as
belonging to the ideal bank of issue"
It was the banking crisis of 1848,
after considerable previous trouble be-
tween the government and the old
banks, which led to definite action by
the government. In this crisis both
the Societe Generate and the exist
ing Bank of Belgium were compelled
to suspend payments. The govern
ment aided them for the moment by
making their notes legal tender, but
having demanded that they restrict
their investments to commercial pa
per and this demand having been re-
fused, the government was in posi-
tion to lay the foundations of the new
institution. From these conditions
sprang the National Bank which was
established by a law of May 5, 1850,
for a term of twenty-five years, with
a capital of 25,OO0,O0O francs ($4,S25,-
000) The charter has been continued
by subsequent extensions, with some
amendments, until 1929, and the cap
ital is now 5OOOO,O0O francs.
The bank was subjected to a serious
test of its solvency and ability to han
die business by the war between
France and Germany in 1870 Belgium
was close to the route of the contend
ing armies, but, as neutral country,
was availed of as the agent of many
financial transactions conducted by
French and German financiers. The
bank met the pressure resolutely by
reducing its holdings of foreign bills,
importing gold, and raising the rate
of discount. So firmly was the credit
of the bank established by this ex-
perience that it was specially stipul-
ated in the treaty Of peace which term
mated the war that among the forms
of payment of the war indemnity ac-
cepted by Germany from France notes
of the National Bank of Belgium
should he included
The basis upon which the notes of
the bank are issued is convertible
commercial paper maturing within
short terms. The note issue is un-
limited in amount and is not restrict
ed by the charter as to the proportion
of cash reserve required to be held.
The proportion of reserve was left to
be fixed by the statutes Of the bank,
which are subject of mutual agree
ment between the minister of finance