Show 0 0 VE R N man BANK UNSUITED TO US would serve politics rather than business needs says R S hecht citing previous eap exp experiences 1 erien ces QUOTES PRESIDENT JACKSON extent and diversity of this country presents different situation from europe and makes regional banking necessary washington N U D C A refutation of arguments in favor of a government owned central bank system tor for the united states is presented in a state ment by R S gocht lin clat president 0 of the american bankers association based on exhaustive studies of E european european cen aral trat banks he also points out the disastrous consequences of previous central bank experiments in the united states our present regional federal reserve system under private ownership is infinitely better tor for this country than would be a government owned and controlled central bank mr air hecht says if history teaches us any thing it is that it is if almost certain that a central bank so owned would be run 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 central banks exercised became objectionable and unpopular he goes on to say what andrew jackson said the continued existence of the second bank finally became a bitter political issue and president jackson succeeded in abolishing it mr hecht says permit me to quote from his farewell adl address ress the immense capital and peculiar privileges bestowed upon it enabled it to exercise despotic sway over the other banks in every part of the country from its superior strength it could seriously injure it if not destroy the business of any of them which might incur its resentment if you had not conquered the government would have passed from the hands of the many to the hands bands of the few and this organized money power from its secret conclave 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 administration considered banking reform it carefully kept away from vesting central banking powers in a single institution and instead introduced the regional idea by creating twelve reserve banks located 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 he continues the great size and diversity of america tends to make a central bank undesirable the central banks of eu rope such as the banks of england prance france and germany cover areas not as large as some of our states stales A cen aral bank in the united states on the other hand would be called upon to ad minister the financial policies po liches of an area larger than all of europe to in chich there are quite a number of central banks subservient to popular demands moreover history has proven that any banking system entirely owned and dominated by the government ally demonstrates much greater ability iu in aiding expansion of 0 credit than ir putting on the brakes at the right time to prevent undue inflation by restrain ing and contracting credit this la is eaon to understand because in times ot of de Pres slon everyone Is urging the government to make money and credit easi and to encourage expansion on the other hand it always has been and always will be a difficult task lor for any government to call a halt in time of apparent prosperity because in the very nature ot of things the govern ment would be very sensitive to bubli criticism and would hesitate to take tahe any action which would tend to curtail business activity it la is such undue susceptibility to popular demands which makes government banking inherently Inherent li weak our studies show that of 0 all the central banks at present existing there are only tour four whose stock Is owned by the government the newest central bank is that ot of canada which opened its doors only a few months ago after a must most exhaustive study had been made ot of the experience ot of all nations with the result that the stock or of the bank ol of canada Is privately owned the american bankers banders association mr hecht says Is convinced that a central bank would not be in the interest in |