The weekly chieftain. [volume] (Vinita, Craig County, Okla.) 1905-1913, 1910-03-18
BY Associated Press.

WAhhlnktOni Mar ll.-boln hufo
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
OF Belgium" by Charles A, Conant,
the well-known banker and author of
"A History OF Modern Banks Of Is
sue" aud 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
tionaI 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 MIR. 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.
II was the banking crisis OF ls4s,
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 Sooiete 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 70 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 n law of May 8, 1860
for a torn OF twenty-five years, with
a capital OF 25.0OO.0OO francs (s4S25,-
000) The charter has been continued
by subsequent extensions. with some
amendments. until 1929 and the cap.
ital Is now 5O.O00,000 francs
The bank was subjected TO a serious
test of its solyency and ability to han.
die business by the war between
France and Germany IN 1870, Belgium
was close to the route OF tho contend. F..
ing armies, but. as a neutral country, /
was ayailed OF as the agent Of many
financial transactions conducted by
French and German iinanciers The I
bank met the pressure resolutely by
reducing its holdings Of foreign bills. T
importing gold. and raising the rate
OF discount So nrmly was the credit
OF the bank established BY this ex
perienee 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 &C.
cepted by Germany from France notes +
OF the National Bank Of Belgium
should be 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 Ia 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 a subject OF mutual agree.
ment between the minister OF finance
and the administration OF the bank. BY
this authority the proportion OF cash
TO notes has been fixed at 38 1.9 per
cent but the minister Of finance has
power TO suspend this requirement In
an emergency Foreign bills OF ex-
change have long been counted as
the equivalent OF gold IN the reserve
and have proved useful on critical oc.
easions In maintaining control OF the ,
Interest is not paid upon deposits