The Operation of the New Bank Act

ent of its government and as banker for the other banks of the country. Each assumes a large measure of responsibility for the banking situation and for the supply of gold within its own country, holding the reserves of the other banks and, so far as possible, compelling them to conduct their business in a conservative manner. Scotland and Canada are the only countries of importance in which this situation is not found, while England, France, Germany, Russia, Belgium, Austria, Italy and Japan are the conspicuous illustrations. In our early history we too had experience with similar institutions?the First Bank of the United States from 1791 to 1811, and the Second Bank of the United States from 1816 to 1836. It has thus been somewhat natural that there should be frequent proposals for a single central institution in the United States. Those who favored it have contended that only a central bank would be able to establish a more uniform or even a lower discount rate, to control the movements of gold into and out of the country, and to hold for immediate use anywhere the supply of gold, which is the ultimate reserve of all the banks. As proof of these contentions, our own early experience and the methods in use abroad have been cited. Objections to a Central Bank.?On the other hand, there is in the United States a deep-rooted objection to any centralization of resources and power. The same attitude of mind that animated Andrew Jackson in the 30's, andtha...