Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-10-07

may be PreVented-What Ranks Are,
and Why Bank Notes Are Not Money.
New York Tribune, Oct. 3.
The meeting of the Chamber of Com
merce yesterday was distinguished by an
extemporaneOus address by Prof. Bonamy
Price, Professor of Political Economy at
Oxford University, upon panics and their
causes. The Chamber was well represent
ed, William E. Dodge, the Hon. David A.
Wells, William Butler Duncan, George 5.
COe, George Opdyke, W. NJ. VerInilye, Pc
ter Cooper, Nathan Chandler, Charles II.
Marshall, James S. 7. Stranaham and ST.
mon De Wiser being among those present.
Mr.. Dodge, as Chairman, introduced Prof.
Price as one whose attaiments in the study
of financial questions was well known,
saying that an expression of his views upon
the spasmodic crises in commercial history
would be doubtless welcomed u the Cham
Der Prof. Prices address was long, and
listened to with great attention. He spoke
as follows:
THE ADDRESS.
Mr.. President and Gentlemen: thank
you very warmly for the honor you have
done me in asking Inc to speak to you, and
l extremely regret that L was not aware
that l should be asked to discourse on this
subject to-day. Had l known it before
hand ! should have written cut a lecture
which would have presented the question
better than 1 can now. But l shall feel
great pleasure in touching upon the main
points, and if my doctrines are in any re-
spect challenged, it will be only great de-
light TO me that the difficulties urged
against it should be stated. The question
then is "Crises What are crises? Great
disturbances of the money market, difficult
ty of obtaining advances, high rates of dis
count, great firms in danger, who is sound
and who is unsound, unknown, whose mon
ey is safe, whose is unsafe, a matter Of
great uncertainty.
Modern trade, as you are well aware, is
carried on upon very peculiar method. |
have no doubt it is in New York as it is in
England. The characteristic is that it is
carried on with other peoples capital, not
the traders. The traders are not the peO-
pie who provide the capital for their bust
ness. Soue they do provide; the bulk GER
tainly not. The distinctive popularity of
modern trade is that it is carried on by
bills, and bills have to be discounted, be
cause bill means, II cannot pay to-day,
but will pay this at three months" The
goods are given, the sale is completed, and
the man who sells holds in his hand apiece
of paper which says that after three months
he vii have his money, but not before.
The man so circumstanced wants to 60 on
with his business, which he cannot do if
he has to wait three months for his funds to
come in. How are his workingmen to be
paid, or his ship to be sent away? That is
done by discoUnting bills at banks, and the
= . =. e.
upon the general trade of the nation by
acting upon the discount market. This
diScounting takes place in banks, and, there
fore, We now see a locality of the storm.
1t is somehow or other connected with
banks.
WHAT Is A BANK?
Banks are a peculiar institution.
know great many Of the eminent bankers
of England well. l have asked directors
OF banks, the Governor Of the Bank of
England, and personages of that kind
very simple question; but never met only
one man, dead and gone now, who could
answer NE this question: What is a bank?
and what does bank deal in? That lies
at the root of the question of crises. I
have only met one, Mr.. Potter, the found
er of the great London Joint Stock Comma
ny, who could answer that question.
know what a grocer is. He deals in can
dies, in tea, in sagO. 1 know what fruit
er IS. If | ask such a man what he deals
in he has not the slightest difficulty in an
swering my question. Now, will any gen
tleman in the room favor me with reply?
IA pause.l Can't anybody tell me? Some
of you are probably bankers. Do you
think me a very troublesome fellow TO ask
you such questions? [LaHghter.l You
draw checks and you pay them, and that is
enough for you. 1t is marvellous in this
nineteenth century that of such a great
profession, such great branch of human
activity, there is no definition, except, per-
haps,- my writings, of what bank is
and what it deals in. But it is essential,
in order TO understand cIiseS, TO understand
what banks are, as they are phenomena of
banking. They are the Chinese Sea Of
banking.
Now the gentlemen will probably say
that banker deals i'm money. l say, No.
/ deny that fiat. a banker is not a dealer
in money. Ii is not an affair of money.
/ dare say many gentlemen will fire at me
now. Shot for shot. 1t is all fair. AN
other pause, waiting for a reply.l Well,
gentlemen. you don't seem ready for fight.
Well, we will go on, then. said in Frazer
a year ago that banker did not deal in
money above One-thirtieth of his business.