The Bridgeport evening farmer., 1910-01-24
AGAINST GREAT
 CENTRAL BANK
A Strong and Conclusive Argument by Henry
 Clews
Before American Institute of Banking In Boston, Jan. 19-Also Opposed to Postal Savings Banks

 Those in this country who advocate the establishment of a Central Ma | tional Bank almost invariably point l to the Bank of England, the Bank of l France, the Bank of Germany, and | the other semi official Government banks of other European countries, as allustrations of their usefulness and National importance in regulating their respective money markets
 But they ignore the fact that these banks deal with monetary laws, and political, social and other conditions very different from our own and that | their territorial environments are al- so vastly different. This inevitable difference is owing largely to the mar rowness of their own banking sys- tems and the smallness of their re- spective countries in comparison With our immense stretch of country from | ocean to ocean.
 Moreover these European banks l are the growth of centuries, and each | is adapted to the special needs of it's nation. Each therefore possesses that confidence of the people which IS also of slow growth. It is especially slow in old countries, but it is lasting; and l in the case of these great banks 1t Is not impaired by their known defects.
 Even the Bank of England is liable, lation by Sir Robert Peel, to be forced to suspend payment in time of panic, and it has several times es- | capped suspension only by the Govern ment,-namely the Cabinet,-sus- pending the operation of the Bank Act. This suspension releases the | Bank of England, for the time be- l mo ifS the stipulated percentage of gold re- | serve to it's circulation, and permits it to issue any amount of it's notes that it sees fit without any gold re- serve.
 The immediate effect of this Gov ernment suspension of what is uni versally called the Bank Act is to restore confidence in the maintenance of the Bank of England's solvency, and to promote confidence in the monetary situation generally.
 This, in turn, reflects the popular confidence in the Bank of England | itself, and the integrity of it's man. l agement. The people feel absolute | ly sure, under such circumstances, that it will not abuse it's power and privilege. Such public confidence | could not be inspired in any other bank in the United Kingdom.
 No such bank as this could be created in the United States at least l not in this generation, nor is it re- 1 quired. The two attempts that were made to establish a central United States Bank were failures, and both banks were wound up ingloriously, | while their charters were repealed by Congress.
 The first United States Bank was | from start to finish a hotbed of poli- tical intrigue and favoritism. It be- came involved in numerous scandals, l and it's Government and other de- | posits were loaned freely to it's | friends,-the friends of the Party in | power,-so that it had comparatively 1 little use for the rest of it's custom CTS. It, therefore, became discredited as a general bank of deposit.
 The second United States Bank, es- tablished in 1916, under the presi- l dency of Nicholas Riddle, was some- what better managed, and was per- l hapS less of a political machine than l the first, but still it was the subject of much scandal, and it's friends-al- ways the friends of the Party in pow | er-unduly mOnopoliZed it and de- stroyed it's usefulness as bank for the people. Under the blighting in 1 f1uence of politics and favoritism, to use a common expression, its business f1zzled out, and, proving unprofitable, it went into liquidation to save itself from insolvency.
 | AS with the first United States Bank, however, it paid it's creditors in full. The political friends of each 1 of these institutions saw to this in l the obsequies, and borrowers were, when necessary, made, or helped to pay up, to avert fresh scandal. | This experience of what was prac- tica1ly Central National Bank should therefore deter us from mak- ing third attempt to esta blish one, for the old objections would still ap- ply to it, besides which it would have a somewhat dWarfing and. blighting effect, directly and indirectly, upon all other banks, particularly the Ma | tional banks.
 l But the proposition to establish a l Central National Bank in New York, | with branches in the other reserve | cities to supersede the existing Sub- vocated by the Administration at | Washington, and also by those bank CTS who expect to control it, or to have a voice in it's management, if it | is established.
 This bank would be under the di- rect protection and virtual, or at least nominal, control of the Government, las it would have to be created by special Act of Congress, it would I act as the fiscal agent of the United States Treasury.
 The prime objection to it is that it and it's branches would be bad sub- stitute for the Suh-Treasuries, and | that, as @ bank, it is not needed. It | would, therefore, be an incubus, and a super1uity, in our monetary and banking system, and a hazardous ex- pertinent. In finance, the fewer ex- periments we venture upon the bet
 ter; and we should always be sure that we are right before we go ahead The banks-State and National already established all over the coun- try, to say nothing of private banking
 houses, supply all the banking facili- ties the people require. That being the case, is it not wise to follow the old adage and let we'll enough alone A more serious objection is that such bank would in all probability
 become the master instead of the ser want of the people, and at the same time overshadow, and perhaps donlf- nere, over all other banks.
 With its thousand millions, or more of deposits, and it's hundred millions
 or more, of capital, it would be very powerful and dangerous factor in the money market, and, through it's prac-
 tical control of the Wall Street money
 market, it might largely control all the markets for stocks and specula- tive comm odities.
 It would, indeed, we may reason ably infer, absolutely dominate Wall Street, at least whenever it chose to
 exert it's power; and in so doing ii
 would dominate not only the markets for stocks and bonds, and cotton and
 foreign exchange here, but for grain