The Washington herald., 1917-10-13
Tells need OF
Central BANK
Holland Shows Significance
Of Guaranty Trusts
Application.
nv HOLLAND.

Charles H. Sabin. president OF the
Guaranty Trust company. a state
chartered institution. In a brief ex-
PLANTATION setting forth the reasons
why his Institution has applied for
membership In the federal reserve
system. mentioned first OF all the
necessity for concentrating the bank
ing strength of the nation. The
Guaranty Trust company will con-
tribute considerably to this purpose
by reason Of the fact that Il is the
largest trust institution IN the world
and Is surpassed in resources and
money power by only one other
American bank, that one operating
under a national charter.
When the monetary commission Of
which Senator Aldrich was chairman.
was well along in its remarkable
work OF investigating the banking
and fiscal systems OF the civilized
nations, the members were persuad-
ed that ii would be of the greatest
value, IL the United States was to
have an improved banking system.
were the basis of 1t to be a central
bank. But at that time public opin-
ion was so strongly set against CEN
tralizing or concentrating within the
control of a single institution the
banking strength of the nation. that
1t was not deemed expedient when
Congress began consideration Of a
new banking bill to incorporate the
central bank system into the meas
ure. Instead OF that Congress Great
ed the Federal reserve board whose
authority CONTROLS twelve Federal
reserve districts. This Federal re-
serve board Is. In fact IL not in name,
constituted with powers which, ex-
ercised over the twelve district
banks. make 1t really a central or
centralized body.
To Amend LAWS
Bankers in this city have been per-
saaded for some time that Congress
will. perhaps speedily after the Eu-
ropean war. so amend the Federal
Reserve banking laws as to permit
the establishment OF q central bank.
President Sabin's statement that chief
among the reasons why the great
Institution of which he Is president
has applied for admission to the Fed
eraI Reserve system Is the necessity
for concentrating the country's bank
ing strength really reflects the view
of members Of the monetary COM
mission respecting the supreme value
of q central bank.
A central bank would probably be
the best medium whereby there could
be absolutely perfect concentration Of
the country's banking strength. The
Federal Reserve system, however, es-
peciaHy at this time when the Amer
lean people are subscribing aid have
subscribed to billions of a var loan
offered by the government, has through
its supremacy over the Federal Re-
serve districts substantial acted with
in its limitations as a central bank
would do.
Great Money Power.
The money power of the United
States so far as that Is represented
by banks which operate under Fed
eral charters and the comparatively
small number Of State chartered
banks which have become and the
great number about to become men,
bers of the Federal reserve system.
is now to be concentrated at Wash
ington in a manner which a few
years ago the people would not have
tolerated. But among the lessons the
war has taught is that one which
shows the necessity for mobilizing,
concentrating and co-ordinating BUSH
ness of various kinds, including the
banking business Already It has
been discovered at Washington that
the fundamental principle represent
ed by combinations, coordination and
cooperation produces, II there be
wise supervision and regulation, re-
markable results so far as efficiency
and reduction of cost are concerned.
Many have been the arguments
made by those who are In authority
in the Federal reserve system with