Show government BANK UNSUITED TO US would serve politics rather than business needs says R S hecht citing previous experiences QUOTES PRESIDENT JACKSON extent and diversity of this ehlt country presents present different situation from europe and makes make regional banking necessary washington D C A refutation of arguments arcu menti la in favor of a government owned central bank system for the united states Is presented la in a statement by R S hecht president of the american bankers banker association based on exhaustive studies of european central banks he also points out the dis estrous consequences of previous central bank experiments in the united states our present regional federal re serve system under private ownership ls Is infinitely better for or this country than would be a government owned and controlled central bank mr hecht says lays it if history teaches us any thing it Is in that it to Is almost certain that a central bank so owned would be run no to meet the varying exigencies of the government in power rather than to serve the commercial needs of the country central banking has been tried twice in the united states but was finally abolished because the credit control which the th central banks exercised became objectionable and unpopular he goes on to say what andrew jackion said the continued existence of the see sec ond Bank finally became a bitter political issue and president jackson all suc ceedee in abolishing it mr hecht says say permit me to quote from rom his bit tare fare well address the immense capital and peculiar privileges bestowed boa towed upon ll it enabled it to exercise despotic sway away over the other banks la in very every part ot of the country from its superior strength it could seriously injure if not destroy the business ot of any of them which might incur its if resentment it if you had bad not conquered the government would have passed from the hands ot of the many to the hands of the few and this organized money power from its secret conclave con would have dictated the choice of your highest officers the forms of your government might for a time have remained but its living spirit would have departed from it when the wilson allson administration con soldered banking reform it carefully kept away from vesting resting central banking powers in a single institution and instead introduced the regional idea by creating twelve reserve banks located la in different economic and geographical sections of the country mr hecht says a plan that has worked exceedingly well because the separate banks are under the guidance of men chosen on account of their intimate acquaintance with the problems and needs of their respective territories lie he continues the great size and diversity of america tends to make a central bank undesirable the central banks ot of europe such as the banks of england france and germany cover areas not nol as large as some of our states A cen aral bank in the united states slates on the ither ather hand would be called upon to ad minister the financial policies poll clea ot of an area larger than all of europe in which there are quite it a number of cen cell aral banks banka subservient to popular Alore moreover over history has proven that any banking system entirely owned and dominated by the government ally demonstrates much greater ability la in aiding expansion of credit than in putting on the brakes at the right time to prevent undue inflation by restrain ing and contracting credit this Is easy to understand because in times of de pres slon everyone Is urging the govern ment meat to make money and credit easy and to encourage expansion on the other hand band it always has been and always will be a difficult task tor for any government to call a halt to in time of apparent prosperity because to in the very nature of things the govern ment would be very sensitive to public criticism and would hesitate to take any action which would tend to curtail business activity it Is such undue sus to popular demands which makes government banking inherently weak our studies show chow that of all the central banks at present existing there are only four whose stock lock la 13 owned by the government the newest central bank Is that of canada which opened its I 1 doors only a few months aio ago after a most exhaustive study bad been made of the experience of all nations with the result that the stock of the bank or of canada la Is privately owned the abo american bankers assoil association atlon mr hecht says Is convinced that a con cea aral bank would not bo be to la the ilia Inter interest cof of the public or the banks ilias post tion he be added Is well understood by the president and the leaders in hl his ad ministration tor for we have been loo abao cutely trank frank with them in ili all of out our discussions and have baa missed no op alty tor for emphasizing that in out our opinion no banking system will lu in the long lone run be sound if it Is in dominated entirely by the ever changing political administrations we should do all we can to keep our banking mechanism as far removed from rom partisan politics its as possible |