The New York herald., 1921-06-25
WASHINGTON PLANS
CENTRAL j. s. BANK
Administration Officials
Favor Idea Urged by
Financiers.
SEE AID TO BUSINESS
SEE AID TO BUSINESS
To Be Formed on Lines of
Bank of England or Reichs-
bank of Germany.
HARDING TO HELP ROADS
Plans for Settlement of Car
riers' Bills Advanced at White
House Meeting.
Special Despatch to THE NEW YORK HERALD
New York Herald Bureau.
Washington, ID. c., June "a.

New York Herald Bureau,
Washington, ID. c., June "a. J
Brought to a fresh realization of
the seriousness of the railroad situa-
ton by his conference with Western
bankers last night, President Harding
devoted his entire time to-day to driv-
ing work upon the domestic and for
eign business problems Of the nation,
with railroads and finance as the chief
features.
Most of the time Of the Cabinet was
devoted to the railroads and the ne
cessity Of financing productivity and
of stimulating domestic and foreign
business. After the Cabinet meeting
the President conferred with Chair
man Clark Of the Interstate Commerce
Commission, James A. Davis, Director
General of Railroads; Secretary Mel
Ion and Secretary Hoover on measures
of financial relief for the railroads
through adjudication and payment OF
claims growing out of Government
operation.
Out of the series of conferences there
is crystallizing a project for the creation
of central banking facilities in Washing
ton for the purpose Of general clear
ing of national financial affairs and to
bring close touch Of the Government
upon the business pulse of the nation.
Officials are coming to the view that
this could be accomplished through the
establishment of an institution here
somewhat similar to the Bank Of Eng
land or the Reichsbank.
wouldn't Overlap in Work.
II would not conflict with or usurp
the functions of the Federal Reserve
system, but would provide a central
bank in that system. There would come
to It daily reports Of conditions.
Suggestions OF this nature have been
made by some Of the bankers attending
White House conferences and the idea
has received favorable reception by
Administration officials.
II was stated at the White House to-
day that the bankers and business men
Of the nation are glad to come to Wash
ington for discussions and closer CO.
operation for the general welfare.
Bankers at the White House dinner
last night laid stress upon the fact that
in their opinion the railroads were the
chief factor in the lack of rapid prog
ress toward better business and better
times. They dwelt upon the need of
Government settlements, which would
aid the roads in meeting their financial
obligations.
Many of the carriers are faced with
difficulty in meeting interest dates on
bonds and many more are having Diff
ficulty with dividends. At the same
time large sums are owed them by the
Federal Government as a result Of Fed
eral operation.
1t was generally agreed. 1t is under
finance. This sum represents the ag-
and counter-claims, aggregating s, 600. :
00O.000 would greatly settle railroad
finance. That sum represents the ag-
gregate Of claims by the roads against
the Government and claims OF the Gov
ernment against the roads. Out of these
claims there Is the agreed fact that
somewhat over 500. 10000 is due as a
result of the guarantee.
Disagree on Foreign Loans.
The conferences held have developed
a couuiCI VI ppDIOn OetWeen EdSIern
and Western bankers on the question OF
the fotation of foreign loans in this
country. Western bankers are opposed
70 the floating Of loans here. They take
the position that such a course has a
bad effect upon the American money
market, that II shortens the amount of
capital available for domestic require
ments. particularly for business and
agricultural production, and has a
further unsettling effect upon exchange
with an appreciation of the dollar.
Eastern bankers are convinced that
financial aid TO European nations is
necessary to rehabilitate them and their
markets and to stimulate our own for
eign trade
The only expression of the Admins
tration views as between these conflict
ing ideas is contained in President Har-
ding's understanding with international
bankers that any further foreign loans
in this country will be closely SUPER
vsed and sponsored only II they will be
4 desira BILE from n domestic yiewpoint