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
Efecting Currency Reforms.
ANSWER SENATE QUESTIONS
Currency Commission of American
Bankers Association Not En-
tireIy Pleased With Bill.

NEW YORK, June 2t-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 subcommittee
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 Aldrich 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.
THE experience of the world"
reads the answer. lis that it Is bet
ter for Government to provide such
currency indirectly, through some pri-
vateIy- 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 It is
better, then, TO have the credit of the
bank called in question than the credit
Of the Government itself.
Currency Limited by Bonds.
Tn 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 fluctuates according to
their market prices"
An elastic currency authorized by
law is advocated, the amount Of 1t to
be controlled.
whether the present requirements
Of reserve for national banks should
be reduced, increased or otherwise
modified" reads an answer, depends
upon how they are to be controlled
or protected. II under centralized
system of control they are to be eco
nomically protected by satisfactory
note issue based on an adequate gold
reserve, and If under such control le-
gal reserve money could be made
available to the banks when re-
quired through proper discounting IA
cilities, we believe some modification
of the present requirements might be
safely made"
Elasticity Is Problem.
In answering the thirty-third ques-
ton in which the bankers are asked
for their consideration Of Federal
reserve division" by the Treasury De-
partment the reply was:
1T is possible for the Treasury
Department to furnish this country
with a safe currency. 1t would be
very difficult If not impossible, to
make that currency elastic, in the
way 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
riod, although their total amounted
to less than s350,O0O,OOO."
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 radical and dangerous reversal
of the Governments policy.
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