Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-11-22
Worlds Great Central
Blu Frederic J. HdSkin.

A bank that has no safe, no cash, no
| counters or cages, cashes no checks ana
writes none, yet deals in billions is some
| thing of an oddity. Add to these curious
| things the fact that this bank is housed
| in building which looks more like
modern apartment structure than
banking edifice and the Bank for In
| ternational Settlements at Basic, Switz-
erland, is the prize celebrity in the bank.
ing world
Actually, this world bank has safe.
! but not in the sense of a vault or large
safe as used in other banks. 1t Is a
small affair and it's contents consist OF
the banks records of organization, a IS
Spanish gold sovereign kept as SOU
venir, a 25-cent California gold piece
sent by some unnamed donor and most
of the still unissued certificates OF bonds
contemplated under the Young plan to
pay German reparations of the First
World War.
AS to cash, there is none on the prem
Uses, except in the pockets of the en-
ployes, and which is their own. The
banks huge sums of cash are never
brought to Basic, but kept on deposit
with other banks and disbursements are
made by them on order. Since all trans
fers to other banks and for the payment
of bills in which the bank acts as fiscal
agent are made by cable or telegraph
and confirmed by letter no checks are
written. The bank is not a local COM
mercial establishment, so there are no
over the-counter transactions.
Although the Bank for International
Settlements was established in 1880 by
mandate of the Young plan for the dis
tribution of German reparations, it has
ceased to function for that purpose be-
cause of the moratorium on such pay
ments, which finally ended in their cessa-
ton. But over the years the banks
scope of work has widened and it's use
fulness increased until it has become a
definite international financial institu-
ton. Into it fguratively flow the cur
rencies of score Of countries, to emerge
as the stabilizers of vast and sometimes
worldwide fiscal operations.
Since the Bank for International Set
Elements was not established by any
government, it is not required to report
to any, and as no member of national
legislature can be director, it is one
OF the most independent financial in
situations in the world The directors
must come from industry. finance or
commerce, and the voting rights rest
with the central banks or their nominees.
There are prospects that when world
peace is restored and financial adjust
ments between nations become a neces-
sity. the work of the Bank of Inter-
national Settlements will be vastly in
creased. Already the present war has
greatly extended the institutions work,
enlarged its functions and it has not
only become a stabilizer for many cur
rencies, but the banks corps of experts
in international finance serves as
board Of consultation for the countries
| allied with it, and also for other coun-
tries as we'll as individual investors
The realism which will unquestion-
ably be taken into account in the terms
of peace will include a sterilization of
each countrys currency, and that is
where the worlds best financial experts
say this bank of banks will come in for
its major task. For one thing, while
little is now being said about payment
for supplies furnished Great Britain,
Russia, China and other allied countries,
the subject is certain to come up later
and some basic program of payment will
be demanded. Those who are familiar
with the workings of the Bank of Inter-
national Settlements say this is the
agency which should handle the job of
settling these inter government obliga-
tons Indeed, every new development
in European economic affairs seems to
find new job for this financial institu-
| ton.
Service is the first goal Of this bank,
and making money from discounts and
fees is a secondary consideration. How
ever, stockholders have been paid reason
able annual dividends on their invest
ments since it was established Among
the American organizers and stockhold-
ers are J. P. Morgan g. Co., the First
National Bank of New York, and the
First National Bank of Chicago. The
Federal Reserve Bank of the United
States was asked to participate as were
the central banks of other countries,
and most of them did, but this countrys
central bank refused. So the House Of
Morgan and two national banks took
the place of the Federal Reserve in
American participation. An American.
Gates McGarrah, was the banks first
president.
If ever bank lived up to the title Of
international, it is the Bank for Inter-
national Settlements. Controlling assets
in excess of $lOOOO,OOOO 900 from more
than a dozen countries, handling 20 sep
arate currencies II nationalities are
represented on its staff of more than 100.
Several languages must be used in cor
| respondence, which means that many
different letterheads and other types OF
stationery are necessary
With the banks billions in assets, and
its ability to command other billions, 1t
can come to the financial aid Of any
country independently, or If one coun-
try wants to render financial assistance
to another, 1t will handle the transaction
as fiscal agent. The bank also buys tbs
currency and bills OF exchange of q
country that is short on funds. It may
be likened to fire department ready to
spring into action the moment the finan-
cial alarm sounds.
The Bank for International Settle
ments was located in Switzerland be-
cause that was neutral country during
| the First World Nyor opd ha,o,,.o +h,%