Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-13
Draft Provides That Control
of Its Management Shall
Be in Hands of Central
Banks of Issue.
AUTHORIZED CAPITAL
TO BE S1O0, 900, 900
Six Creditor Governments Shall
Participate in Profts-Director-
ate to Include 25 Members.
Director General Will Be Chief
Executive Officer.
BY LELAND STOWE.
By Radio to The Star.

BY Radio to The Star.
PARIS, May l3..-To what far-reach-
ing extent and with what consummate
attention TO multitude of details, the
Young committee has conceived and
developed the project of the Bank for
International Settlements" is revealed
in the now virtually finished draft of
the bank which will constitute the most
important chapter of the committee of
reparations experts report.
The prefaces and the first section of
this recently devised draft for the in
ternational bank were published in the
Sunday issue of The Star yesterday in
Paris dispatches, the remaining part
of the draft of the bank, known as Sec
tions and is published herewith.
Would End Old Dawes Plan.
1t is Immediately evident from these
documents. which comprise the final
IL pages of the bank scheme proper,
how thoroughly the Young plan pro-
poses to sweep away the old Dawes plan
and what a unique and unparalleled
financial structure it proposes to erect
in its stead.
If the Young plan is adopted it will
inaugurate an entirely new experiment
in international banking, into which the
great financial brains of q score or
more Of countries were drawn as con-
tributing cooperative factors.
The experts draft stresses in every
paragraph the tremendous care with
which Owen d. Young, Sir Josiah
Stamp, Alberto Pirelli, j. P. Morgan
and their associates have steered away
from the idea of a ''superbank" and
work so that it will assist, rather than
interfere with or intimidate, national
banking institutions.
Striking Features Listed.
The most striking provisions of the
final two sections of the draft of the
Bank for international Settlements may
be summarized thus:
/. 1t is provided that the control Of
the banks management shall be in the
hands of the central banks of issue,
and that the six creditor governments
shall participate in its profits
q. It is provided that "in any country
wherein there is no central bank the
functions of the central bank under
this scheme may be performed by some
banking organization or consortium
agreed upon between the Bank for In
ternational Settlements and the govern
ment and bankers of the country. In
the United States these functions shall
be performed by the governor or chair
man of the Federal Reserve Bank OF
New York"
In this connection it Is understood
that since it was revised the draft has
had a clause added to this last SEN
tence to the effect that it is left OPP
tional to the governor of the Federal
Reserve Bank Of New York whether
he should serve as a director of the
international bank, should appoint a
director or fulfill the other functions
which the governors of the European
banks of issue will fulfill. This con-
dition is believed to have been inserted
to leave the Federal Reserve free
hand as to the type and amount OF
its participation.
8. It is provided that the governor
of each of the central banks of the
seven countries here represented, or his
nominee, shall be a director of the
bank ex oflcio and that each governor
shall appoint one more director in
addition.
Powers Are Outlined.
4. The international banks powers
are stipulated as follows:
The bank may make advances, in
vest its assets in long or short term
securities, buy and sell gold and ex-
change, accept earmarked deposits OF
gold, resell its assets, borrow on the
security of its assets and in general
carry out all operations such as are
desirable for the execution of this plan
and are in accordance with sound COM
naercial banking practice. In particu-
ar, it may raise funds by the issue Of
bonds
5. The bank shall create a genera
reserve fund to which one-fourth ant
then one-tenth of the profits shall b
paid until 1t amounts to twice thu
CONTINUED on Page 4, Column D.