The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-10-17

abolished. The central bank should hold
the gold reserve of all the banks and of
the nation. The reserves OF the other
) banks should consist of credits on the.
ledger of the central bank. SubSyStemS
should be formed, consisting of heads
In important commercial centers, with
branches scattered over the country, thus
carrying the facilities or great, strong,
solvent banks to every hamlet and cross
road in the country. The only legislation
required is the repeal of the sub
treasury laws, and of the provisions Of
the present national bank law which in
any manner restrict the business of
swapping credits, and which prevent
banks from conducting The banking func-
ton in more than one locality. 1t would
not be necessary, or, indeed desirable,
to grant the central bank a special char
ter with or without special privileges.
The banking business is a part of COM
merce, and commerce is an individual,
not a government, function. The COM
mercial bank is a cowerker with the
merchant, and in the conduct OF it's legiti-
mate business of swapping credits should
be as free as the merchant. Grant the
banking business this freedom. and the
system, including the central bank, viii
form itself along the lines of the eco
nomic laws to which alone commerce by
right owes allegiance.
Such a system. history conclusively
proves, has the capacity to continue ex-
erc1Sing the banking function, and there
by sustaining normal values, during the
Heroes commercial crises. a system
having such a capacity, in connection
with the genius for trade possessed by
the people of the United States, and the
wealth of its natural resources may make
New York, instead of London, the chief
city of the world, and the United States,
Instead of England, the creditor nation
of the worid-without it, never.
The creditor nation fact is not alto
-gether matter of superior wealth or
capital. England is the creditor nation,
but it may well be doubted whether she
has as much wealth or capital as the
United States. 1t is a matter of organi-
cation of capital. Let me illustrate: If l
have 81, 100000 of capital, as an individual
can only loan 81. 000, 600. But if L organ
lie banking business with my capital
and exercise the banking function of
swapping credits, may collect interest
on many millions, just as some OF your
banks with million of capital loan five,
ten, twenty and even more millions. Eng
land has so organized her capital by
means of her magnificent banking SyS-
TEN that she is the banker of the world
and collects tribute from all the nations
of the world in the form of interest, not
for the use of her wealth or capital, but
for the use of her credit. ParadoXical as
1t may sound, it iS literally true that by
means Of her splendid banking organiza-
ton England collects interest upon mil
lions and millions of her own Indebted
moss 10 other nations. 1t IS a very pr0flt-
able business to collect interest on what
one owes. and it is this which makes
England the creditor nation. The United
S1N4t-S, as It's C1hlIaI IS now OrSdl1tZeu,
can only loan to foreign nations actual
capital, and as long as these conditions
last cannot compete With a nation which
can loan all it dares 70 owe. 1t is not
more capital, mOr6 FeaIth, or more
money which the United States needs in
order to become the creditor nation, but
a better organization. Tie fact that APP
pr0Ximately a third of the money of the
United States is locked up idle and use
less in the treasury is evidence that we
have money enough.
The capital engaged in banking in the
United States IS much larger than the
capital engaged in banking in Great
Britain. l investigated this point a few
Years ago and found that the paid-up
aggregate capital of all the joint stock
banks of England, Scotland and Wales,
Including the Bank of England, was only
$345, 100000, while the capital of the ma
tional banks alone of the United States
ct the same date was $648, 600 900. The
Ioanable medium of exchange produced
by the banks of Great Britain was 3,S22,-
o00O00, while the loanable medium of eX-
change produced by the national banks
OF the United States was only S2,60 COCO, 900.
By their superior organization the banks
&C Great Britain, with approximately
half the capital, produced nearly twice
the amount of loanable medium of ex-
change
1t was e dream of Sir Walter Raleigh,
as it is of some of our statesmen, that
whoever controls the seas will control
ever controls the commerce of the world
Will control the wealth of the world and
therefore the world itself. But I venture
TO suggest that you may Sl.bSidize ships
to sail the seas, and your armies
ana naVles may carry the f1aS
to all the islands of the seas,
put you will never control the commerce
<hf the world, nor the wealth of the
sorld, nor the world ITSELF until you have
q banking system which can manage the
exchanges of the world during CONNER
moi 70 S,a .aN1
Fairly uniform rate of interest.
1 would like to ask those statesmen who
seem to think that carrying the flag at
the tail end of ships, changes the course
MANILA will buy six months drafts on
New York against conSignments as long
as he knows that by the time the draft
reaches New 1o: k for rediScount the cur
rent rate of interest may be any rate be-
tween : per cent per annum and Il of
per cent per day, or that the banks of
New York may then refuse to rediScount
: at any rate, because they are scared; and
on what terms could the Manila banker
reimburse himself by selling to importers
crafts on scared bankSi
would like to ask them what they
Propose to do in the next panic. Perhaps
they expect that the president of the
SElted States will issue a proclamation
to all the merchants of the world stat
Ing that there is panic, that half of the
Banks are busted, and the remainder
so Paralyzed that they will be unable
70 90 business Tor probably three years,
and that he hopes foreign merchants will
continue to consign their goods to the
United States, but make their drafts on
Canada!
Wares of commerce follow the drafts of
commerce instead of a flag and the prin--
eipai reason why Great Britain is the
market place of the worlds commerce is
not because the union jack flies at the
tail end of so many ships, but because
avery banker and merchant in every quar-
ter OF the world knows, within 2 or
per cent per annum, the exact value of a
draft for rediscount in London.
Gentlemen, fear that the length of my
address has aready wearied you, but I
have stated ony a few of the historical
facts-wflich are available in support of
which occur in this country are pre-
ventabIe. 1 hope you will not misunder-