New-York tribune., 1913-11-03

oo,,ed from the action Of the Senate
Ranking Committee, which on "euneS-
dow hogan some drastic remodelling OF
.ba class-Owen bill in an endeavor to
+ake away its Objectionable features
and put it in such shape that II Will
-ooet the requirements of the business
interests of the country without serl-
ously menacing economic conditions
raview of the proposed currency
hill nv Baron Ewald B. y. Won MeHeh-
thin. the expert of the lmperlal Damn
of germany. goes into the question Oh
tho necessity Of banking reform III the
1-rited States and the ability OF pom
ticians 10 conduct banking business
The baron says that no government
alternating in four-year terms lioiii
the highest official TO the youngest
clerk Is able to do efficiently CONNER
o;o, business. He cites the history OF
the first bank Of the United states III
corporated in i79l and compelled 10
uouidale in 1911, and the second Dahh'
,,,cornorated in 1916 and definitely
suspended in 1S41, to prove that any
political bank is certain to become !he
bone of political contention and must
by necessity prove to be failure he-
ferring TO the European system, ne
saws. "It is generally admitted IN
Europe that no government banK IKE
the Russian Central Bank nor any ap-
solutely private bank like the Bank OF
England can safely fulfil the purpose
of central bank. These two systems
have proved extreme, and the most
modern countries have therefore Gre
ated central banks with seml-oiilclai
character in similar forms as the I'M
nerial Bank of Germany, compen-
sation Of the advantages Of pubic
institution with those Of an indepen-
dent private one, but eliminating their
| disadvantages
Referring to the regional plan as
proposed in the administration meas
ure. the baron comments: "A radical
change in the management OF the
! twelve banks will be the result from
every new election of the administra-
tion. a condition highly contrary to
principles Of banking stability
Touching on the statement by Senator
owen before the New York Chamber
of Commerce that the proposed fed
eral reserve bank system will be
! great public utility bank, such as the
| Imperial Bank of Germany, the baron
| notes the following differences:
| Senator owen stated in his speech
before the Chamber of Commerce that
the proposed federal reserve bank sys-
tenn is a great public utility bank like
the Bank of Germany. But the mere
| fact that the bank may receive some
fftv or one hundred millions govern
ment deposits on call does not infiu-
| ence the banking function of such CEN
! tral institution. The German bank is
a public utility bank, because the func-
tions of the German treasury are trans
| ferred to that bank, not only the gen.
eral fund, but also the currency trust
fund and even the war chest Of six
hundred million marks, previously kept
| i'm the julius Tower. in Spandau. Ger
| many has a mint and an office for the
| Secretary of Finance and his staff,
! but it has no treasury and sub-treas-
| uries. All public revenues from taxes
and duties as well as all disbursements
for civil and military offices and for
| the public debt pass through the i'm
| perial bank The provisions in the
| currency bill are quite different The
! Treasury is by no means abolished, but
even enlarged in its functions. The
new federal reserve notes are also re-
| deemabe with the Treasury besides
| the present banknotes. United States
/ notes and Treasury notes. The total
! gold funds of the Treasury are 1.263
millions. the silver funds 496 millions.
or a total of lawful money Of 1,IJ9
million dollars on August 10. 1913.
| Adding the amount of lawful money
kept with the proposed federal re-
| serve DdIhS dS 90 l-o per NtHl
on an average of 800 millions
federal reserve notes issued. amount
| ing to 100 millions. the legal reserve
will be 1859 millions, against which
are outstanding 1,0l0 millions gold
certificates and 4I2 millions silver cer-
tificates. leaving a balance Of 3I7 mill
| ions as the country's specie reserve
| against outstanding 40 millions ma
| tional bank notes, $50 millions United
| States notes, millions Treasury notes
and 300 millions federal reserve notes,
amounting to "A total of l.392 million
! dollars, a reserve of only - per cent.
| In times of financial distress or III
case OF war tho American citizen may
become aware how little the so-called
money in his pocket is worth In real
money value. The proposed new issue