The Relation of the National Reserve Association to the Treasury
Journal of Political Economy
One of the merits of the Reserve Association plan is that it contemplates the complete withdrawal of the federal government from the banking business. Ever since the government was organized, it has undertaken to carry on banking operations in some form or other; first, as part owner of a great commercial bank; then, when that experiment seemed unsuccessful, and for the last seventy years, as the custodian of its own vast revenues and checking accounts, and finally, during the last
... as the exclusive manager of that branch of banking which has to do with the issue of circulating notes. No other important commercial country, at least none of the countries of western Europe, has attempted for several generations to engage in government banking in any of these forms, either as owner or part owner of a commercial bank, or as maintaining a separate depositary for its own funds, or as handling the issue and redemption of bank notes. Our government has long since ceased to participate in the ownership of commercial banks, and among the multitudes of proposals for banking legislation, sane and insane, with which the country has been flooded during recent years, I have yet to see the first suggestion that it should attempt a repetition of the banking experiments of its early decades. We need not, therefore, devote time to considering the idea of a government-owned bank.