New-York tribune., 1910-02-06
FOR CENTRAL BANK
CONGRESSM AN'S TALK.
Leslie ". Sha7o Opposes Free
land at Republican CLUB.

The question of reforming the ohi'eu
States currency and banking system
discussed before the Republican oiuo
terday afternoon by Z. B. Nreelaho' Va
Salamanca, N. Y, chairman OF the I'm
mittee Banking and Currency III "
House of Representatives. and Lesile W.
Shaw. former Secretary of the 1reasuiS }.
Mr. Vreeland advocated the establishment
of a central bank and Mr.. Shaw oplosSu
Mr. VreeIand. who was the first speaker
began by saying that the Amer ii'aA
panics' were 'preventab!e, and the rehiea'
for them consisted in prohting py 'ho
perience Of the great commercial Id go
of Europe in the last fifty years ana ohi'is
upon two principles-frst. the cohceiili ''oi-
of reserve moneys; second, the concentra-
ton of note issues.
Those countries in the last fifty years
have revolutionized their banking ana cui
rency systems" he continued, land in that
time we haven't made a change aoh !
want 20 set up the Second United states
Bank again or bring over here the Bank Oh
England or the Bank of France ana set /.
Up. But we can take those two princlpies
and adapt them to American conditions.
Then the speaker read without comment
an outline of his plan for central nahh.
with limited powers, under government su-
pervision It should have, he said cal'l-
tai of $10o0o1.000. the shares of STOCK 10 DC
held by national and state banks ana us
governor should he appointed by the fresi-
dent and confirmed by the Senate.
He would have the directors elected py
the stockholders, with geographical repre-
Sentation. and the stock held by each palik
limited 10 3 per cent of the capltai ana
surplus of the bank and non-transferabie-
The dividends. he said. should not De aoo'e
4 per cent, and whatever was earned ABOVE
and beyond this should go into the united
States Treasury; there should be no interest
on deposits; the bank should do business only
with banks and the government and IN the
buying and selling of foreign bills or e&-
change; it should hold in its vaults part
of the reserves of the national banks, ana
it should control the note issue after the
plan of the Reichsbank of Germany, which
may issue notes at will UP to certain
point, after which it must pay a tax of 5
per cent of its additional note issue TO the
government
MIR. Vreeland would have the Secretary
OF the Treasury, the Controller of the Cur
rency and the Treasurer OF the United
States members of the banks board OF
directors.
Ex-Secretary Shaw attacked this plan
first, because he said it did not provide for
contraction, as we'll as expansion OF the
currency and without the former elasticity
was non-existent. He said central bank
could not work under the country's dual
system Of government, and he continued:
IF you know of any important city in
this country where the Standard Oil group
or the United States Steel group doesn't
control bank, hold up your hand. Now
l have no quarrel with these interests
they are friends of mine. If we have a
central bank | want the Standard Oil or
the Steel crowd TO control it. but am not
giving myself any anxiety on that score
they will
Mr. Shaw's remedy for present conditions
was to treat the United States Treasury
as central bank and the national banks
as its branches. and when the occasion de-
manded it allow them to issue credit cur
rency the credit of lhe United States,
with tax like that imposed by the Ger
man government on an excess issue of
notes by the Rechsbank to insure its
prompt redemption. To aid contraction
and expansion in normal times he would
have the Secretary of the Treasury ien6 to
the banks in the fall the funds of the gov
ernment on which to base their expansion
of asset currency TO move the crops, and
withdraw these deposits in the spring 10
contract this currency.
Another speaker was Edwin Fisher. Dep
Uty Controller OF New York City An in
terested listener was Senor Don Enrique
Cortes. Colombian Minister to the United
States.