Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-22
BANKERS FAVOR
CENTRAL BANK.
NOT ZONE PLAN
Regional Reserve Associations
Second Choice as Means of
EHeCting Currency Reforms.
ANSWER SENATE QUESTIONS
Currency Commission of American
Bankers Association Not En-
tireIy Pleased With Bill.

NEW YORK. June 21.--One central
reserve association, with branches,
would best serve the present banking
and currency needs Of this country,
according to answers formulated by
the currency commission OF the
American Bankers Association to 80
questions asked by a sub committee
Of the Banking and Currency Com
mittee Of the United States Senate.
Financial interests stated to-day
that this was the basic principle OF
the Aldrlch currency bill. created by
the Aldrich committee subsequent to
four years investigation of banking
and currency systems throughout the
world
Regional Reserve Bodies Suggested.
Failing that" continues the bank
ers' answer, "a small number of
regional reserve associations, also
with branches, might be organized.
The smaller the number Of regional
reserve associations, however, the
more effective the reserve control.
1.-THE experience of the world"
reads the answer, rs that 1t is bet
ter for Government to provide such
currency indirectly, through some pri-
vately owned corporation under strict
Governmental supervision, rather
than put the credit of the Government
at issue with every note placed in cir
culation.
Troublesome times come to every
community and every nation. and 1t is
better. then, TO have the credit Of the
bank called in question than the credit
Of the Government itself.
Currency Limited by Bonds.
"In the use Of Government bonds
as security for circulation, the vol
ume of currency instead of fiuctuat-
ing with the varying requirements OF
trade. is limited by the volume OF
bonds and nuctuates according TO
their market prices"
An elastic currency authorized by
law Is advocated, the amount OF It TO
be controlled.
"Whether the present requirements
Of reserve for national banks should
he reduced. increased or otherwise
modified" reads an answer, depends
rnon how they are to be controlled
or nrotected. II under centralized
system of control they are to be eco
nomfcallv protected by a satisfactory
note issue. based on an adequate gold
reserve. and II under such control Ie'
asI reserve money could be made
available to the banks when re-
CURED through proper discounting IA
cilities, we believe some modlhcatloh
NJ the present requirements might be
safely made"
Elasticity Is Problem.
In answering the thirty-third ques-
tion in which the bankers are asked
for their consideration of a Federal
reserve division" by the Treasury De-
nartnent, the reply was:
"It is possible for the Treasury
Department to furnish this country
with a safe currency. It would be
very difficult, If not impossible to
make that currency elastic, in the
wav Of contracting and expanding
according to the needs of the pub
lie
THE great danger is that If Dor
rowers go direct to the Treasury,
politics would become an all-im-
portant and dominating influence,
Our Government experienced great
difficulty in retiring the greenbacks
in gold as presented at a recent pc
Rod. although their total amounted
to less than $3.50, 100000"
The answer to the final question is
concluded with the statement that
the proposal that the Government
should assume not only large demand
liabilities on note issues, but also
enormous demand liabilities in the
form of bank reserve deposits would
be a radical and dangerous reversal
of the Governments policy.