New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-03-03
AFTER MEAT HEADS FOR BANK REF wv"
RITTER RESERTE LAU
Stickney Fauors Central PIan'
with Assets Currency ont.

A. b stfckney formerly president OF tne
Chicago Great Western Railway, told TUE
members of the Students Guild of the Ne"
v,rl, state Society of Certified Public Ac-
countants last night that he was in favor
of a central hank, unless it's purpose was
to foster assets currency 1t should be
created he said TO his audience, which had
assembled in the Engineering Building, al
No % West goth street. that it might lump
together the hank reserves of the country
and nrevent parics and that Il might pro-
tect the country's gold reserve from expor-
t.fion nv raising its bank rate, after the
manner of the Bank of England. He con
tinued:
1T is nv conviction that such hank
cannot he created by act of Congress
Neither is it necessary. In my judgment
the only action necessary on the part OF
CONGRESS is to repeal the restrictions which
the national banking Law places upon the
management of the reserves of the national
banks This will leave the genius of Amer1-
can commerce free to take care of Itself
and such a central reserve bank as | al
yocate will come into existence. and, to-
sether with system of banking fitting the
conditions of this country, will he developed
along natural laws. which will he able to
sustain the commercial credits of the vast
commerce of our country i'll times of panic
az well as in boom times.
But all banknotes, the speaker thought.
should he secured either by actual golo.
dollar for dollar, or by the best government
bonds.
The central bank" said Mr.. sttckney.
performs all the functions of the ordinary
commercial hank and. in addition, by ar
rangement with other banks. the bulk or
the money owned by the ordinary banks Is
aggregated in this central bank in the
same way that in the beginning Of bank
irg. the money of the merchants was ag-
gregated in the strong-Toom of the gold
smith The American system OF banking
is often talked about. but, in fact, there
is no system. The banks of this country
are not parts of the whole plan connected
in such a manner as to create chain OF
mutual supports, but they are local and
independent institutions. In times of com
mercial crises each must depend on itself,
and as it is evident that one bank. without
cooperation of the others. cannot support
the enormous credits of commercial ma
ton like the United States, each begins 10
scramble to increase its cash reserve at
the expense of the other banks-and to re-
duce its liability-and TO adopt David
'Harum's theory DO unto the other banks
what you know they will do unto you. but
do it first
This unseemly scramble is never wit
messed I'm any other country except the
United States. because all other commercial
countries have a system of banks so con-
neeted that each bank constitutes a mutu-
al support to every other bank.
Continuing. Mr.. Stickney said:
There never Was a man or bank or a
government so rich that its assets currency
would circulate at par as money for any
length of time The great and rich govern
ment of the United States tried It at the
beginning of the Civil War. but it was no
sooner issued than it began to deprecidte,
and it never PASSED at par until the gov
eminent purchased gold reserve, specially
pledged to the redemption thereof. and
later this reserve had to be increased ny
one-half.
IF the purpose Of a central bank is to
foster assets currency then I am opposed
to the esta f5ishlnent of such central
bank"