The weekly chieftain. [volume] (Vinita, Craig County, Okla.) 1905-1913, 1912-01-12

tHlS agency WOulQ Ill would be as
central depository for a portion of the
reserves which are required by law
These reserves form the ammunition
of our 10000 soldiers. Each soldier
should have in his cartridge box E
sufficient amount of ammunition tC
meet any ordinary attack. The bal
ance should be centered in one depos
itory, where the knowledge of its pres
: ence, and its great size, will inspire
confidence, and where it can be rem
J dered easily available for intelligent
control, for the need of any of the sol
diers on the firing line
The next function in Importance
would be the issue of currency We
all recognize that enlightened nations
base their currency upon credit, with
substantial and adequate reserve of
gold. A currency system. to meet the
requirements of a nation so teemipg
with energy and enterprise as this, must
be so elastic as to expand and con-
tract with the requirements of trade.
Most of us are convinced of the neces-
sity of an expansion of currency, but
many do not realize that it is just as
necessary that the currency contract,
which it is not needed by the indus
tries of the country.
The local bank is the bank of dis
count for the business community, and
under ordinary conditions can take
care of the requirements of the COM
munity which it serves. a central as
sociation should be bank of discount
Tor the local banks. Let the man on
the street picture to his mind that the
note-issuing of the central association
is merely to extend to the local bank
by means of the rediscounting of its
negotiable paper, the same assistance
to tide over an emergency that the
local bank extends to him as a bus-
ness man.
The functions of any note-issuing
power are merely those of bank for
banks. The man who is operating
even the simplest industry will under
stand this, if you say to him that when
conditions arise which make it impos-
sible for him to collect the accounts
due as readily as is usual, or through
some change in trade conditions he
finds he has in stock a larger amount
OF merchandise than he can comfort
ably carry, he goes to his banker, ex-
plains his conditions, and, if they are
sound, pledges certain of his assets. or
his commercial paper properly indors-
ed, and obtains assistance, until nor
NAL conditions reassert themselves.
Our recurring currency stringencies
have been due to the fact that when
the banking community as a whole has
extended all the relief within its power,
and finds that collections are slow, or
that merchants are overstocked with |
the merchandise in which they deal |
there is no bank to which the bank |
can appeal for temporary assistance.
If central institution, created for the
general good of the entire country,
were in existence, the banks in turn
could pledge the commercial paper
which they held, and obtain currency !.
10 meet the needs of the communities
which they serve. There is absolutely
no difference in principle, and If the
problem be brought down to this level
t will be understood by anyone.
The third function in Importance for
he central association would be to
1eal in gold and foreign exchange, in
)rder to conserve our gold reserves.
rhis is the ammunition train which
must be brought up by order of the
commanding general, to replenish the [
'eserve ammunition. Each soldier can {
lot have his own ammunition train, K
md in the case of our financial system y
he power to import gold, or to deal in
oreign exchange for the purpose of in.
gold to this country, must j
'e delegated to a central control. I
These three functions are about al l
is necessary to grant to a central as (
ociation, and surely they are not very
adical. Let us recount them: q
First-The power to centralize and
manage the reserves of the banks, so
hat they may be fluid, and ready for
Instant use.
Second-The power to issue bank /;
otes by rediscountiug, when neces- !
ary, for existing banks, maintaining, !;
f course, an adequate gold reserve
gainst all notes which are issued:
nd
Third-The power to deal in gold s
nd foreign exchange, in order to pro- Y
ect and build up our gold reserve, +
hen necessary. =