New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-27
Dean Johnson Says 1t Is PraCtI-
caIIy the One Urged in 1906
by Commerce Chamber.
FAVORS ONE CENTRAL BANK
Sectional Plan 100 Per Cent
Bad and He Believes Sen
ate Should Abandon
It for Other.

nerce said Yesterday no student of bank
ing should be surprised at Mr.. Wander
lips declaration in favor of a govern
ment controlled central bank.
MIR. VANDERBILT" he said, was vice
chairman Of the special currency COM
mittee Of the Chamber Of Commerce.
which reported in October, 1896, in favor
Of a central bank Of issue, to have
branches in the leading cities and to be
under the direct control Of a board of
governors appointed by the President OF
the United States. l was secretary OF
this committee and the minutes of the
proceedings, of which / have COM
plete file. show that the central bank
idea was first introduced by Mr.. Van
derlip, and that considerable argument
on his part was necessary to convince
certain members Of The committee that
such a recommendation was worth while,
for il was generally felt that bankers and
tho public would not then receive the
suggestion with favor
THE committees report was unani-
mously adopted by the Chamber of Com
merce. and l cannot remember that
single word Of criticism came from any
New York banker. In view Of these
facts, the reports from Washington that
Mr. Vanderlp's present plan for central
bank is regarded as a shrewd scheme to
mystify and confuse our currency re-
formers is certainly edifying.'
"Is Mr. Vanderlps plan practically the
same as that which was favored by the
Chamber Of Commerce in 1862"
All Good or All Bad.
Essentially, yes. In finance, as in
mathematics. there is only one correct so
luton of any problem. In 1906 Mr.. Van
derlip, / know, arrived at the conclusion
that the only right solution Of our cur
rency problem lay in the creation OF
central bank. controlled by the govern
inent 1t is the same conclusion that has
been reached by practical men and econo-
mists in all other countries where the
problem has been up for solution.
But the currency committee of the
Chamber of Commerce did not work out
the plan in detail. as Mr.. Vanderlip now
has done. They knew that the suggestion
would come as a surprise TO bankers as
well as to business men, and that several
years must elapse before it could be I'M
derstood and therefore appreciated. The
committee instead of preparing detailed
plan for central bank. merely recon-
Inended as a temporary makeshift grad
uated tax upon the issues of national
banks. believing that some relief could
be afforded by such a slight change in
our present system.
81 have not talked with Mr.. Nanderlip
about banking since 1905, but have read
his testimony before the Senate commit
tee. and l can discover no reason TO be-
neve that he has changed his mind since
that time"
But was he not inconsistent in his at
ttude toward the Owen-Glass bill? He
remarked some time ago that in his opin-
ion the bill was 50 per cent good Is there
only a difference of 20 per cent between
a central bank and system Of twelve
regional banks?'
You'd better put that question TO MI
Vanderlip. In my opinion. the twelve
sectional bank system is 100 per cent bad
inst as a fye-eeg omelet would be bad
81 It contained one doubtful egg. Mr.
Vanderlip is certainly not to be criticised
for having tried to improve the owen
Glass bill in its details, even If he did
not believe that the measure could be
made what il ought to be without funda-
mental changes. ] suspect that he felt
Ike an expert builder of flying machines
10 whom an amateur brings new con-
trivance for criticism and suggestion, and
the expert tells him that no amount Of
tinkering will make his machine fly.
He lsbored in Vain.
"Of course Mr. Vanderlip could not talk
that way 10 the Congressional committee
about a currency bill which is said TO
have the support of the President OF the
United States Like others who believe
in a central bank as the only right solu-
ton of our currency problem, including
many bankers and economists, he labored
with the Senate committee long and hon
estly in an effort to make the bill work
able measure ! am not surprised that he
finally gave up the job in despair and
came out positively and definitely with a
statement OF the plan which represents
his own convictions
II appeared that Dean Johnson was not
entirely in agreement with the Vanderlip
plan While he believed that the bank
should be absolutely under government
control. he held that much would be
gained by giving the stockholders a voice
in the management of the purely bank
ing or business details.
Alexander Hamilton was right" said
the dean, when he wrote that the keen,
steady. and. as 1t were, magnetic sense
of their own interests as proprietors, in
the directors Of bank. pointing invaria-
bly, to its true pole, the prosperity OF the
institution, is the only security that can
always be relied upon for careful and
prudent administration
'Hamilton's mistake lay in his copying
of the Bank Of England, a public institu-
ton under private control. A bank of
this sort would not be tolerated In the
United States. That it would get into
politics is a foregone conclusion, even
though its managers were entirely inno-
cent OF political design or ambition.
Nevertheless a public bank must be a
business institution II II is 10 have any
power TO protect the national credit. Its
business can best be transacted by prac-
tlcal men who are primarily interested in
the business success OF the institution.
49, 49,, ,,,prapna IN authority and In