The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-04-24

They will speak of the existence of CEN
trail banks in France, England, Ger
many, Russia, Italy, Switzerland and
Japan, which, during war periods or
great panics, were instrumental in quiet
ing the financial pulse of the respective
countries in such a way as to avert Sc
rious consequences.
The difference is pointed out between
these countries and the United States,
when the least fiuctuation in the money
markets, government prosecution of cor
porations such as was started during the
President Roosevelt administration, or
the movement of crops from one part Of
the country to another causes a with
drawal of money from the centers of
trade with its consequent rise of interest
| rates and an inevitable panic.
With the central bank, it is declared,
| such conditions cannot arise. When
| money is needed in any section of the
| country for the moving of crops arrange
ments can be made easily so that farmers
and small banking institutions can OBJ
| tain whatever currency is necessary. If
the government contemplates action
against the big corporations it is said,
the central bank will be able to hold the
balance of money power. SO that money
cannot be withdrawn from circulation.
The idea advanced is simply that where
| money is needed 1t will be sent from this
| central institution to relieve any financial
| stringency, and that Wall street will, In
| a measure, cease to be the pulse of the
| country.
| To offset the theory that the establish
ment of a central bank will be the worst
| calamity that this country has had since
| the days of Andrew jackson, Director of
1.-THE Mint Andrew gives an interesting
description of the working of the Swiss
banking law, Switzerland being the last
country in Europe to adopt the system
of central bank.
1.-THE bank began business on the eve
of a panic which 1t successfully resisted
and finally overcome" He said, THE
capital of the bank is $9,6500o0 divided
into 100000 shares of 500 francs each.
| Two-fifths of the capital was reserved
for subscription by the cantons in pro-
portion to their population, and one-fifth
for the independent banks of issue at the
ratio of their authorized issues. The
remainder was offered for public subserip-
ton. 1t is still in existence and prosper
GUS. That deals the Jackson bank a
body blow.
This banking is unlike other banks of
European countries in that it has no ac-
tual central seat there exists only seats
of the various bank authorities" he con-
| tinued. "All branch offices have their
own management, when grouped under
| a uniform management constitute the ma
tional bank. The bank is authorized to
acquire by private treaty existing banks
which carry on similar business and
after liquidating their business to con-
tinue them as branches of the national
lbank Each branch office is under con-
troll of a manager who is appointed for a
six year term.
"In the transition of the old system of
independent note issue to the system of
| a central bank the Swiss law provided
that the local bank should Withdraw their
circulation within three years from the
beginning of the actual operations of the
| national bank. At the expiration of this
period, which will soon arrive, the nation
al bank accepts obligations on Its own
| behalf of it's successors to cash any OF
the notes of the bank of issue that may
| still be in circulation within the follow
ing 30 years In the case of banks that
have handed over to the national bank
the cash equivalent OF their outstanding
bank notes prior to the expiration of
the three years, the national bank ac-
cepts the above obligation of redeeming
the old notes not presented for redemp-
| ton.
.In a great measure the working of the
Swiss national bank law will be advo-
Gated by the monetary commission when
| the general scheme for the establishment
| of a central bank has been prepared
/ Some tentative plans are the retirement
| of all note currency and uniform cur
rency of the central bank substituted; a
general and uniform banking law; the
designation of branch banks, the estab-
lishment of broad working system
whereby notes can be discounted and a
general interest rate Other subsidiary
considerations have been formulated
] which are based on the general banking
i systems in vogue in this country
4 Mr.. Andrew spoke of the beneficial eff
fleets of a bank Of this nature, and as
= serted that 1t meant the financial sal
walton of the country