New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-19
War Banks
How They Could Be Used as Engine.
of Reconstructive Economics
By Charles Ferguson

Andrew Carnegie once remarked that u.
organization of personal skils and abiI...
that made and operated the Homestead MAJ.
was a larger asset than the plant itssv
since the organization could reproduce a..
plant. while the plant could not reprodu..
the organization.
This principle that the organization il mar.
important than the plant applies quite a,
we'll TO any commonwealth as a whole. Ys,;,
is an obscured truth Everywhere our bps,.
ness communities assume the contrary. Tbs,
assume that the plant is more important tina,
the organization-and consequently that N.
ownership of the social plant should dom,.
nate the social organization.
1t is impossible to achieve high deere.
of working force or tool-power in any bu,,.
ness community where this economic SOLE.
cism obtains. There cannot possibly be an 81.
fcient economy of natural resources and
human abilities in community where .hs
correlations of working forces are deter.
mined by those who speak for the plant. bu,
not for the organization.
The plain truth is that when there /, mead
of high productive power the rights Of ab.
stract ownership must necessarily be sub.
jected to the demands of the community as
working organization. In the long run hi,
rule is good for the inventor as well as 70,
the public at large, since 1t prevents inss.
ton of security values and makes invest.
ments safe.
Ownership Not Sovereign
But even if the rule were not to the in.
ycstors' advantage, it must needs be applied
in war times such as these. The time has
come in which no war can be successfully
waged by country overruled by the interest
of creditors. in derogation of the needs Of the
organization that works and fights.
The strength of Germany at the outbreak
of the war was in large part due to the fact
that the institution of ownership was not
sovereign there. 1t was in considerable de-.
gree subordinated to the organization Of sci.
cnce and technical skill. This was sgraIized
by the establishment of the engineer in the
German bank and by the penetration OF the
banking process in Germany by the spirit OF
he engineer.
IL should be set down as a canon OF war
strategy that Germany can be beaten only by
financial economy that subordinates, even
more completely than she has done the own.
ershp of the plant TO the command of the
working organization.
Hence the need in the United States at this
moment of war bank in each of the twelve
Federal Reserve districts, operated under a
directorate Of Industrial experts and tcono-
mists.
Accordingly il is here proposed that the
National Defence Council, with the approval
of the Federal Reserve Board give such help
as is lawful toward the creation of twelve
such banks. inviting the five national engi.
neering societies TO take the initiative in
moving for charters and choosing the direc.
torates.
These banks may be regarded as financial
auxiliaries of the National Defence Council,
actuated by private patriotic enterprise upon
official suggestion and with official coopeH-
tion for the purpose OF modelling the
working forces of the country and improving
the efficiency Of the industrial organ ration.
they should have large capitalization, with
a maximum dividend of, say, per cent A
dividend Of 4 per cent might have priority
over the salaries of directors.