The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-01-08

custodian or the depositcrs' money, and re-
sponsible to them for it, deposits would be
deemed safe long as the government itself
Is deemed safe? Moreover, even In the event
OF temporary distrust Of the government.
or or It's ability to pay, where would be the
advantage of Withdrawing deposits payable
IN government currency?
Under such a system would there not be
a cessation of the boarding that generally
withholds part, and at times withdraws
a large proportion OF the money or the coun-
try from circulation?
Since under such a system banking would
be a public function, and not private bust
ness conducted for individual profit, would not
the tendency be towards a decrease in rates
OF interest?
Is 1t not Fundamental and insurmountabe
objection to the proposed National Reserve
ISOLATION the so-called Aldrich plan) that by
its scheme OF organization II proposes to fasten
absolutely by statute for a long period of
years in the hands of the few who constitute
the present money power the same control.
and even greater control, that they now exer-
else over the money OF the country without
the aid Of legislative enactmentY
Assuming that the country has advanced TO
a condition in which q government system Of
banking is practicable. and ignoring the bugn-
boo Of the danger from political influences,
what are tho objections to a system OF bank
ing organized and governed upon the follow
ing general lines:
l. department OF finance. or the depart
ment Of the treasury. invested with appro-
pirate and adequate powers. having q general
supervisory authority and control over the
national banking system and the finances of
tire currency end specially TO issue and
retire emergency currency upon the advice OF
the governors OF the Central Clearing House.
This department would have charge of the
maintenance OF all reserves the issue and
redemption OF currency, authorization of
the establishment of banks, including the es
adjustment OF branch banks in foreign coun-
tries in cooperation with the national sys-
tenn. &c
2. A central clearing house under the
agement OF board OF governors appointed
100
for long term OF years, and removable
for cause.
The central clearing house would be clear
ang house and bank of deposit for ali the banks
OF the system, including the foreign branch
banks, the depositsry of the funds and money
of the government, and. bank OF general
deposit, but would not make negotiate
loans, except TO the banks OF the national
system and to the government, and would not
be in any respect a bank OF discount to IN
dividuals or corporations. 1t would be the
depository OF all reserves that may be re-
CURED to be maintained by the system or Its
constituent parts for its or their purposes.
or by the government, unless it should be
Tound expedient to have district clearing
apuses ,of the same character and similar
powers and duties subordinate 10, and under
the control OF the central clearing house. in
which event the district clearing house would
be the depositaries of such reserves for their
districts and the banks Wherein. Similarly
the deposits of the government mld be dis
tributed by the central clearing house among
the district clearing houses
The central clearing house would have con-
troll OF credits generally, prescribing rules
TO the classes of securities TO be accepted by
the banks for loans, the percentages tchange-
able from time TO time). to be lent the
various classes OF securities. controlling and
limiting, permitting increase of volume of
credits generally and in localities, according TO
their conditions. and supervising the business
OF the banks generally. would have the power
TO fix uniform rates OF discount, raising or
lowering them the situation might require.
and would determine when and in what
amounts emergency currency should be issued
by the government and when and how the
same should be retired, having at the same
time power to transfer money and currency
from banks and sections where there is an
excess sections and banks where q def
cheney exists crediting the lending and cnarg-
ing the receiving banks.
The central clearing house .tand district
clearing houses IL they be found expedient1
should be required to purchase an gold that
IL offered, issuing therefor notes which should
be cancelled whenever returned TO one OF the
be Cancelled whenever returned 10 one OF the
banks
In the event Of district clearing houses being
esta blshed they would be required TO make
detailed reports monthly TO the central clear
ing house. OF their own condition and OF thu
condition Of all banks In their districts.
The central clearing house fand district
clearing houses) would have an adequate staf
IF inspectors. with full power OF inspection
and examination into the condition OF each
individual bank, in order to have and exer-
else complete control over credits in local.
ties. These inspectors would also be charged
with the duty of Investigating and reporting
upon conditions in the locality of the bank
as well as upon the condition OF the bank,
go as TO enable the central clearing house
Tor district clearing housel to determine the
reasorahleness OF the volume and character
of the banks credits.
g. AS many separate banks OF deposit and
discount as may be needed, and wherever
needed for the benefit of the public. Each
bank 10 be under the management of board
Of directors elected by the depositors from
among their number. and manager
appointed by the board OF governors of the
central clearing house Cor board OF governors
OF the district clearing house, as the case
may be) OF their own choice. or II preferred
from among a number of persons designated
by the directors OF the bank. The manager
and directors for the first year might be APP
pointed by the board OF governors OF the
central clearing house Cor OF the district clear
ing housed.
The manager would be bonded govern
nent cffcer. holding ONCE during good be-
hav!or, hui rernovabie for cause by the board
of governors OF the central clearing house Cor
district clearing khouse,. both the manager
and directors to be subject TO heavy penalties
for mi.manasrment and breach Of trust
The bank would not have any capital stock
and consequently no stockholders deriving
profit such from the bank. the operating