Evening star., 1925-12-27
AMERICANS FORM
NEW BANK OF CHILE
Plans OF Pennsylvania Used
in Establishing In
StitutIon.

Correspondence Of The Star and the Chicago
DAILY New.
SANTIAGO. Chile One Of the most
Important accomplishments of the ad-
ministration Of eX-Presdent Arturo
NleSsa ndri WAS the formation of the
central Eank Of chile tBanco Central
dc Chilel. now being organized on plans
drawn up by Prof. T.. w. kemmerer
of Pennsylvania.
The new bank which will have a
capitaliZat ion of l5G. 900 900 pesos mom-
inally 475p .000i. is the foundation
upon which Prof. kemmerer elected
to base the financial reforms he felt
necessary in Chile. The Nemmerer
financial mission has had little real
sympathy from the politicians of Chile.
What il was able to establish in Chile
In the three months it was here was
due to backing given by the army
group that has dominated Chilean ar
fairs for year. 1t is said, and sener-
ally believed. that the army leaders
who were running affairs in Chile. al
though President AleSSandri and his
cabinet were nominallN in control. told
Prof. kemmerer To 20 ~ TAR as he
liked in shaking up Chile's financial
affairs and that he would be backed up.
Politicians on the Outside
Politicians were not in high favor
with the leaders of the armed forces.
and the carte blanche given To KEN
merer made him A virtual dictator of
Chile'S financial affairs for the time
being.
1t is apparent that rrof. kemmerer
took the army leaders al their word.
He soon discovered that they could
and would make good their promises
II support him over any objections the
cabinet might raise to his proposals.
II was hut short work for him 10 pre-
pare plans for the new bank, which is
fashioned after the one he organized
for Colombia. with certain changes to
Fl peculiar Chilean conditions.
One Of the principal desires of the
commission was 10 keep the bank out
of politics and the politicians out of
the bank When the commission sub
mitted its draft to President AlcSSandri
and the minister of finance, disputes
arnse at once over some of the essen
.ial features. Alessandri requested
Prof. kemmerer so to modify the plan
as to place the appointment Of the
president. vice president and general
mana ger of the bank in the hands of
he president of the republic.
The mission refused to modify its
recommendations on these essentials,
causing deadlock which was broken
immediately by the military party,
which forced the acceptance of the
The new institution will be bank
Vt issue and rediscount and will have
he general features of central banks
established in other countries in recent
years While the state becomes a
shareholder and furnishes part Of the
-anital. it is in no sense state bank,
but quasi-public institution in which
the general com immunity il given rep
r~sentation.
States Influence Limited.
II iS chartered for 80 wears has its
home office in santiago and may cS-
tabIiSh Ira anChcS elsewhere in Chile ~
the directors elect Its capitalize tion
is made M of 150.0n0 shares nj l.h0n
pesos each. divided into four classes.
all having equal participation in divi-
dends and in assets in case uf liquidA-
lion The government is required to
Subscribe to so 900 ,00p in shares. Ma
tinnal commercial banks are required
to subscribe for shares UP I" 10 per
cent of their paid.,Ir csnit.,i, and for
fign commercial banks doin" business
in Chile arc on the same basis as the
national banks Other shares are To
hc offered to tho public. preference
To be given To allutmentS rf 10 shares
or less.
Care has been taken To reduce po-
litical influence in the management as
music as possible. OF the 10 directors
provided for, the assigned to the
state are 70 be named by the presi-
dent. but may not be members of Con
-ress or salaried employees of share
holding banks. The state shares IN
the bank are to have no voting power.
The bank is TO have monopoly of
issuing money in Chile, its notes to be
received at par and without limitation
as TO amount. - one Of the most bene-
fetal results expected from the new
institution iS q stabilizing of Chilean
exchange which for years has huctu-
ated rapidly and disastrously inc
new bank organization fixes the none.
tarv unit at .1S3057 grams Of fine gold
To the peso which makes the mint par
So.121652 or S.219i93 pesos t" the
american dollar.
(Copyright. 1925, by Chcsg" Daily News CO..