The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1913-10-17
ITALIAN FINANCIER
TELLS US HOW
Says Successful Currency Plan Can
Only be Effected by Central
Bank Of Control.

ROME. Oct 17,-That q permanent
and successful currency reform in the
United States can only he effected by
the establishment of a central bank
of control-not, however. under the
direction of bankers as advocated by
Former Senator Aldrich-is the belief
of Luigi Luzzatti, former minister OF
Italian finance, former prime minister
Of Italy and who recently refused the
post of financial adviser to the new
Chinese republic, In an article pre-
pared by him for the United Press he
today gives his views on the pro-
posed currency legislation In the
United States, as follows:
TBy Hon. Luigi Luzzatti, former prime
minister Of Italy and administer of
finances. written for the Unitec
Pressl
There has already been noted the
clamor with which the Americans of
the United States decided upon some
time ago and completed their inves-
tigation of the question of banks of
issue for the purpose of reforming
| their present inadequate currency sys-
TEN.
At that time all Europe was levied
upon for information and Italy's con.
tribution WAS competently made by
Signor Canovai. did not at that
time make any comment. not because
OF lack OF courtesy OF lack of inter
est, but merely because l was then
at the head of the government. Now,
must admit, l am not sorry kept
silent. In fact, the proposed laws for
the reform of the currency in the
United States, which have followed
the investigation into the question Of
hanks of issue, appear to me most
strange. It is not, indeed to be won
dered at that no one, not even Presi-
dent Wilson, is satisfied with them
! In the first place, believe, former
Senator Aldrich, who was the moving
genius of the currency investigation,
wished to create single central bank
administered by bankers. His plan
! was open to many criticisms, both in
: substance and in FORM but the idea,
however, Of single central bank is
unquestionably the right one. Now, l
: believe, the latest proposed law, would
furnish bank note currency, created
by the national government, to twelve
different authorized banks OF issue or
omission which in turn would secure
the bank notes to the national gov
eminent by commercial paper and
which could maintain guarantee re-
serve fund of SO Is per cent Of gold
or other legal money. This certainly
: is more exact conception of good
! banking rules, the issuing OF bank
currency on commercial paper and
!, the guaranteeing In part OF the eur
rency thus issued by reserve fund
OF gold or other legal money. In this
way is ended the persistence in ths
! old times of error of covering tbs
: bank currency with government
bonds. 1t is in fact merely the adop
|, ton of the new system which has
!. ready been generally in vogue II
n Europe for some time past, and which
!. the United States alone has been SLOW
:. to adopt.
However, leaving to one side thu
I, considerations aroused by the twelv'
banks of omission. which is opposes
h to the present Gay tendency OF unit,
eI the only tendency, as is to be seel
IS In Switzerland, that is capable of reg
IS ulating opportunely the currency, tn
e sight exchange, the inward and out
It ward flow of gold-who Is going 7
e. decide upon the severity of the dis
% counting Of the commercial paper
,r Either, In one way or another tn
r state will take hand and polite
al will thus enter in, discrediting the re
,e sponsibility of the bank or each ind
ID vidual administration OF the twelv
st banks will act Independently an
p. there will be twelve different stand
Of ards of discounting, either severe 0
lax according to tho competition c
se other banks, spirit of absolute rigid
lie it. etc.. etc.), which will determin
W the soundness of the bank curenc
k. in circulation, in which case tn
nj doubts thus created will react In MI
W ments of financial crisis on the bank
De Of emission Themselves, thus aggrf
is waiting the condition of the industria
lie markets
lie In fact, the grand studies whic
have been made by the United State
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