The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-03-31
Congressman Lemke's Idea

AClAy e6VeAVO1lOs
Congressman Lemke's Idea
Introduction by Congressman vii.
liam Lemke Of new bill to SCRAP
the federal reserve system and substi.
tute for 1t Bank Of the United States
demonstrates anew that our new con
gresham has no lack Of ideas.
Whether or not one agrees with th<
details, 1t seems apparent that thu
bill provides for certain things which
nearly everyone will agree are bene.
fetal.
The Bank would be financed by 9
bank note issue of $4,000, 000, 900 and
would be controlled by q board of di.
rectors appointed by the president
one from each state. The president
would select each state representative
from list of three men submitted BY
the governor Of the state in question
All funds held by the government
except gold and silver, would be de-
posted in the bank. The latter, along
with gold certificates, would be held
by the treasury. Use of such gold
would be limited to transactions by
the government in foreign transac-
tons.
Deposits could be received from
any state or political subdivision and
would be guaranteed by the govern
ment.
Loans could be made to any state
or political subdivision with the
bonds Of the district obtaining the
loan pledged as security and a limit
on the amount Of bonds such SUBJ
divisions could issue for such pur-
pose. The bank also could loan to
the federal farm loan board for the
purpose Of making new farm loans at
not more than one and a half pe-
cent interest.
The national Indebtedness would be
removed by the issuance of bank
notes and all securities pledged with
1t, for loans could be made the basis
for new money issues.
The executive committee would be
required to regulate the value Of the
currency and stabilize it on the basis
Of the average value of a list of not
less than 800 or more than 400 COM
modities for the period from 1915 to
1925. This average value or price
would be declared the normal and
the currency would be expanded or
contracted in such manner as to keep
1t on the agreed level.
Items most likely to gain popular
support are those for the ear-marking
Of United States gold for use by the
government. It would provide a nor
NAL basis for the maintenance Of the
present situation in which the gov
eminent has cornered the nations
gold for this very purpose. The bill
recognizes. as the present admins
tration has done, that gold means
little in the internal affairs of the
nation but is all important in set
thing foreign balances. On this basis
it should be reserved for that use.
Sterilization Of the dollars value
certainly IS q desirable thing. Meas
ured in terms of things it will buy,
the dollar now is much larger than
it was in 1929 and 1890 before the
disastrous fall in prices began.
Whether the government should
loan money to states and other sub
divisions as q regular thing. Is open to
but it IS doing just that now
through the Reconstruction Finance
Corporation.
How the Bank of the United States
would tie up with the private bank
ing system or what effect it would
have on private banks IS not dis
closed. Whether it would supplant
the federal reserve banks in redis-
counting private business paper is
not made clear.
The ends to be gained by a real
shake-up In the governments fiscal
system are real enough. There is no
question that certain federal opera
tions have been Of more benefit to
the big bankers than to the people
generally. Whether Lemke's idea i
the best remedy, or II the cure would
not be as bad as the disease, is q
matter for debate.