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December 23, 2011

Historical Echoes: Winning Essay on Central Banking Gets $100 (in 1910)

Amy Farber, New York Fed Research Library

In 1910, Bankers Magazine announced that the American Institute of Banking would give prizes of $100 and $50 for the two best essays on central banking. (See “Prizes to Be Offered at Chattanooga Convention,” page 132.)

    Here is the description of the contest from the magazine:

The Institute offers $150 for the two best papers on the subject of a Central Bank. The papers should contain about 5000 words, and be confined to the principle involved, and the advantages to be gained or lost by the establishment of such an institution.

The writers may take either side of the question, but are cautioned against giving any space to the detail of organization.

    Eighteen essays were submitted. First place was awarded to J. E. Rovensky, a banker. Second place was awarded to A. M. Dickerson. The first-place essay was printed in its entirety in a 1911 issue of the Journal of the American Bankers Association, pages 41-45. The announcement of the prize begins on page 40.

    The essay concludes:

The organization of a central bank in this country would in time be considered one of the most important events of the century.

With our vast natural resources and growing population, we lack but a banking system capable of supporting the necessary structure of credit to place us in a position of commercial and financial supremacy.

    The value of the $100 prize would be about $2,300 in 2010.

    Later, in 1918, when Mr. Rovensky was vice president of the National Bank of Commerce in New York, he wrote “The Whys and Wherefores of the Federal Reserve System,” published in American Industries.

    Here’s a picture of Rovensky in 1908 (in middle), when he was a member of a Pittsburgh team arguing in a debate in favor of more cash reserves for New York banks.

The views expressed in this blog are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

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