Pine Bluff daily graphic. (Pine Bluff, Ark.) 1893-1942, 1913-06-22
Say That One Central Re
serve Association Would
Help Country's Needs.
co N D EN- N S SYSTEM
Thirty-Three Questions Are Asked BIZ
Subcommittee of the
Senate.

New York, June 21.-One central
reserve association, with branches,
would best serve the present currency
and banking .eeds of this country.
according to answers formulated by
the currency commission of the Amer
lean Bankers Association to thirty
three questions asked by a sub-com-
mittee of the banking and currency
committee of the United States sem
ate.
Financial interests stated today
that this was the basis principle OF
the Aldrich currency bill, created by
the Aldrich committee subsequent to
four years investigation of banking
and currency systems throughout the
world
Failing that" continued the banker
answer. "a small number Of regional
reserve associations. also with
The smaller the number of reginal
reserve associations, however, the
more effective the reserve control.
eff there are to be number of re-
gional reserve associations they
should be under some kind of central
control, in which the government
and the various associations should
have representation.
"The experience of the world"
reads the answer, lis that it is bet
ter for government to possess such
currency Indirectly through some pri-
vatcly owned corporation under strict
governmental supervision rather than
put the credit of the government at
issues with every note placed in cir
culation. Troublesome times come to
every community and every nation,
and it is better then to have the Gre
it of the bank called in question than
the credit of the government ITSELF"
In condemning the constitution by
national banks Of a bond-secured
currency, the following comment is
made:
"In the use of government bonds
as security for circulation the volume
of currency instead of fluctuating
with the varying requirements OF
trade, is limited by the volume of
bonds and fluctuates according to
their market prices"
AS elastic currency authorized by
law is advocated, the amount of it to
be controlled by the gold reserve re-
quirements against it.
"Such gold reserves" said the ans
wer, SHOULD be ample not less than
so per cent as recognized minimum.
A special tax might be levied upon
anw deficiency of the reserve below
the stipulated amount of it, this tax
to be increased as the deficiency In
creases. Such reservation would. in
our opinion. prevent over expansion
of the currency"
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 says:
TT is possible for the treasury de-
partment to furnish this country with
a safe currency. 1t would be. very dif-
ficult, if not impossible, to make that
currency elastic If the sense of con-
tracing and expandings according to
the needs of the public"
| aThe great danger is that If Dor
rowers go direct to the treasury poll
tics would become an all Important
and dominating influence. All gov
ernments experienced great difficult
ty in retiring the green-backs in gold
as presented at a recent period, al
though their total amount announcer
to less than $350,OO0. 000.'
The final question is concluded
with the statement that the proposal
that the government should not as
sume not only large demand haDiii-
ties on note issues but also enormous
demand liabilities in the form OF BANK
reserve deposits would be radicai
and dangerous reversal Of the govern
ment's policy.
win McCray and Frank chown9
ara in this city from Rison.