Salt Lake Tribune | 1914-09-19 | Page 6 | State Central Bank

STATE CENTRAL BANK. Governor Colquitt of Texas has come forward with a proposition to establish a state bank with a capital of .2O.n00,-000, .2O.n00,-000, The object, as stated in a message of the executive to the legislature,, is 'to meet financial emergencies,' to administer the permanent state school fund, act as custodian of the state bank guaranty fund and as reserve agent for state banks. ' ' Or the nine dircctorsof the ir.f titutinr, three would be members of the state board of education, three men nominated by them and three nominated by the state banks. The state board of education edu-cation would be required to subscribe for $17,500,000 worth of stock for the state school fund andlthe state banks $2,500,000. Governor Colquitt is a very busy man. When the Mexican revolution was in full swing and there was trouble along the border, he came within an ace of declaring war on Mexico in his capacity of chief executive of the Lone Star state, and added to the perplexities of the administration at Washington at a time when every effort was being put forth to bring order out of ehuns without with-out involving this country to the extent that it would be neee--sary to send soldiers sol-diers over the line. Having given up his martial idfas and aspirations, Colquitt has evolved tne state central bank idea jut at the time when the national g'lvernnient is about to inagurate the new system of regioua. reserve banks. We do not know how the proposition of the governor will be received by the legislature or the people of Texas, but it strikes us that a state central bank with $20,000,000 capital run by the board of education would not appeal to the good sense of a majority of the people. If, however, the state of Texas should go into the banking business in the manner man-ner above described, and the other states should enact similar laws, it would not be long before the politicians got hold of every one of these state financial institutions, for since the days of Marcy the victors have always appropriated the spoils: and the state central banks would be regarded as legitimate prey. A crash would eventually result and the people of the country given, another an-other lesson in finance. , Texas is a rich and powerful state and is evidently possessed of an enormous school fund. It may be difficult to invest in-vest this money to the best advantage, but the state legislature should hesitate before using these funds for the purpose of organizing a state central bank, with the school board in control. The risk is too greats