New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-28
Argentina and
Brazil Plan New
Banking Systems
May Adopt Features En-
bodied in Our Federal
Reserve Banks


pose the placing OF the banking sys-
tens of those countries on q stronger
and better working basis. Plans pro-
posed 70 achieve this end in either
republic embody in greater or less de-
gree features Of the Federal Reserve
system in the United States. The fnan-
c.ers OF South America, il appears,
have become greatly impressed with
the cohesive strength that the whole
financial and business situation OF this
country has acquired since the oper-
alton Of the Fedora! Reserve system
has unified the former system Of un-
organized thousands of independent
banks by cen-ralizing reserves and So
id.ty.ug resources.
Ir Brazil, according 20 reports from
commercial! representatives Of the Ma
tional City Bank. 10 has been definitely
proposed 20 make the BGncO de Brasil
q bank OF issue, with the lucIm-
bent possibility OF rcdIscOuIting for
other banks This important lnnova-
ton. 10 .s generally believed. viii be
carried out By the authority Of the
Fedora. government IN the near future
The bankers and business men Of that
country are said TO be keenly alive
% the advantages which would come 20
that country through better national
banking system.
New Argentine Bank Proposed
Meantime President Irigoyen of the
Argentine Republic has transmitted
messages 10 Congress in whicn he pro-
poses a new Bank Of the Republic and
an issue Of 100000 pesos .S2l2,5OO,-
600 in United States currency in bonds
% establish the government and ma
i0ral finances of Argentina on a
stronger basis. The bank. If II becomes
fact, will be a state Institution, with
Argentina responsible for its finances.
L. Is proposed that the chartered
banks now existent in Argentina,
whether controlled by Argentine inter
es-s or By foreigners. If permanently
dom.c.led there. may elect 70 adhere
10 the Argentine national banking sys-
TEN by o special form Of Incorporation
which Will eut.t.e them % the priv
i,eEes Of red.scOu-t and Of clearing
through the Bank Of the Republic, al
the same time bringing them under the
supervision and examination Of the
bank, and necess.tating their holding
bonds 20 am amount 1t least 20 per
cent Of their deposits, 10 be used as a
basis of credit extension.
The plan has met with outspoken OPP
position. IL is held by some 20 be
strongly suggestive OF an attempt 20
combine the financial purposes of the
national bank act of 1868 Of the United
States with the economic purposes Of
the Fedora. Reserve system.
AavIces received by the National City
Bank from its BueuOs Ayres branch in
innate that the plan has not yet gained
enthusiastic support among Argentine
business men and bankers, who are
much In the dark about the sdmlnIstra-
tons policies, and oppose II on several
eDec.ec grounds. The Argentine Con-
gress has shown an inclination 20 raise
issues with the administration. But,
on the other hand, II is reported that
the projected law was prepared with
great care, after sounding the opinions
Of Congressional leaders, IN order %
avoid including provisions that would
cause opposition.
President Irig0yen's critics, it is re-
ported, al admit that he has a serious
problem Of government finances 70
meet, and that he is entitled 20 digni-
fed respect for an attempt 90 meet
them, even when they say that they DO
not regard some of the provisions az
sound The Argentine government has
been hard put 20 u 70 meet It's imam
r.aI reces i-.es. The administration
had favorabiy negotiated a foreign
loan. when Congressional delay car
%. q Ia r.F rTr
of war by the United States against
Germany and international develop
ueuts made the loan then impossible
The Argentine government, which had
borrowed largely before, y now con
fr0uted with the necessity Of raising
large sums Of money az home.
viii Control Note Issue
With the establishment Of new de-
rar.mor- Of issue. the Ba1co de Brasil
r. is explained. would be given the eE-
elusive privilege Of issuing circulating
notes payable 90 bearer representing
deposits o.. Brazilian national treasury
notes made I'D anticipation or receipt or
revenues or against accounts OF the
treasury for which credits have been
arrargct by the Tribunal Of Accounts.
Bills Of the states and Of the Federal
district would also serve as basis Tor
the banks issue of Dos circulation. The
Institution would be empowered 20 ls-
sue them against redl-couuts effected
hr other banks. and against discounts
made direct with It on the responsible
rtr of TWO and three name commercial
paper, mortgages, warehouse warrants,
stores of coffee valued a. SD per CENT
OF the previous years price, other ma
t.aral products ETC..
.r order -0 avoid an indefinite eN-
mansion Of the banks circulation by
this business, i- rs proposed that the
bills issued by b. must be Withdrawn
Within three months Of the settlement
Of tine obligations for which they Will
De created when anybody pays note
against which the bank shall have IS
sued i-s bills, any IF the banks bills
dat come In with the payment shall
be- immediately burned, and any other
money shall ba held .u trust against
an equal quantity Of the banks own
bills Gin the latter shall be secured and
DESTROYED. In accordance with an agree
uc1t with the government.
Al. guarantee OF the value OF the
banks bills lu the hands OF the public,
h. fs rrorosed that the Ranco de Bras J
shall establish a special fund OF gold
bullion. notes Of the Caiza de Con-
~arsao and notes Of the Federal debt.
Through conducting d Withdrawal or
naprr money from the national treas
mr. the bank VIII obtain a comm. G.
Zion payable periodically which will be
pledged In this special fund. The dlyl-
Gard of the bank will be limited, and
the excess of profits devoted 20 this
fund. When the fund shall amount 70
third Of the banks bills out 10 CIR
culat.on the government w.ll guarantee
lilo conversion Of it's bills IN specie. A