judging of credits is a matter of business which should be left in the hands of business men, and that the government should be kept out of business .... The Owen-Glass Bill proceeds, in this respect, more on the lines of the Banque de France and the German Reichsbank, the presidents and boards of which are to a certain extent appointed by the government. These central banks, while legally private corporations , are semi-governmental organs inasmuch as they are permitted to issue the notes of the nation —particularly where there are elastic note issues, as in almost all countries except England—and inasmuch as they are the custodians of practically the entire metallic reserves of the country and the keepers of the government funds . Moreover in questions of national policy the government must rely on the willing and loyal co-operation of these central organs .”
That is a very illuminating passage. It will be well worth the reader’s time, especially the reader who has always been puzzled by financial matters, to turn over in his mind the facts here given by a great Jewish financial expert about the central bank idea. Observe the phrases:
(a) “without giving the government any part in the management or control.”
(b) “these central banks, while legally private corporations ... are permitted to issue the notes of the nation.”
(c) “they are custodians of practically the entire metallic reserves of the nation and the keepers of the government funds.”
(d) “in questions of national policy, the government must rely on the willing and loyal co-operation of these central organs.”
It is not now a question whether these things are right or wrong; it is merely a question of understanding that they constitute the fact.