The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-11-12
OUR RAPID PACE
Controller Ridgely Speaks to- the
Bankers Association Of the
! Strain, on Facilities.
The Enormous Increase in the Vol
=
ume of Business-Loans and
Their Bases.

New Orleans, Nov. l2.-At the meeting
Of the Bankers association Controller or
the Currency w. B. Ridgely spoke on the
change in banking conditions
Mr., Rideely said, after referring to the
enormous increase in the volume OF gem
eral business in the Jnited States, and
more particularly in the financial and
banking operations: 49,
1T is becoming more and more appar-
emit that there must be some curtailment
of operations or increase in facilities,
rather by the addition of new means or
more efficient use Of the old ones, II we
would avoid seriously trouble, If not dis
aster. For several years there has been
steady and enormous increase in the vol
ume Of all kinds of business which has
necessarily produced very large expan-
sion. We now find ourselves In the con-
dition Of the railroad, embarrassed by
the volume of traffic. With all the ma
chinery Of exchange strained to the ut
most to keep up the present rate, and with
every channel swollen to the full with the
rushing tide. the slightest disarrangement
spreads at once, and is very far reaching
In its effects We must either reduce the
volume Of traffic or add to our facilities
Tor handling it. In the present condition
there Is not sufficient factor of safety
and there IS danger of the strain exceed
Ing the limit of elasticity If it does not
reach the point of ultimate RUPTURE
garding farm lands and manufactures last
year: Mr.. Ridgely said:
The total amount Of loans, s7,169, O0O,-
600, is only about 60 per cent of the value
OF one years manufactures, and only
about 40 per cent Of the value Of the COM
blned farm and manufactured products
for single year. These loans are 43 per
cent of the value Of the farm lands Of the
United States, and y per cent of the
capital invested In manufactures. To me
they seem to be no more than should be
made on the values which exist for their
bases and that we are therefore not ON
an inflated basis Of loans. The stock
panic Of May 9, 1901, would have pro-
duced a crisis and depression which might
have lasted for years if we had not been
in a condition Of very great industrial
strength. This followed in few
months by the assassination of the great
president, who had so justly been con-
sidered such factor in the revival of
business, that for a few hours 1t looked
as If it might all be undone in a day by
his tragic and fearful death; but such
was the strength of our condition that
outside of the speculative markets there
was not the slightest halt In the onward
march.
I'm spite of all this the banking and
financial situation is looked upon with
considerable apprehension. We cannot
disguise the fact that with reserves run
ming down, not only in the reserve cities,
but in all the banks of the country, the
situation is serious, and requires close
attention and careful handling. Now is
the time for caution and care in bank
management.
Nothing can prevent the development
and growth Of this country. We have all
the elements which are necessary and
great lead over all competitors. The final
result is absolutely certain, but it may
from time to time be impeded and checked
as it has been by bad influence and by
trying to do too much in too short a time.
The pace We have travelled for the past
five or six years has been~a rapid one.
The signs are mot lacking that it should
be moderated before we are too far spent.
There Is yet time, and with prudence
and care we should be able to avoid any
lasting i'll effects
Assets Currency. --..: =.
In an address on "Assets Currency"
Horace White said in part:
LET me explain what we men by assets
currency. This is a phrase peculiar to
our own country. Properly speaking, all
bank notes are assets currency, since their
goodness depends upon the assets of the
issuing bank. This is true of our national
bank notes, since the bonds deposited in
the treasury as security for them are
assets Of the issuing bank. So the DIG
tinctive feature Of assets currency, as We
use the term, is that the bank itself holds
all the assets on which the goodness of
the notes depends, instead depoSitlng
some part Of them in the public treasury.
The reason for lodging portion of them
In the treasury Is to guard against loss
through bad investment, fraudulent man
agement or robbery. These banking
risks exist always and everywhere. Yet
assets currency prevails in all civilized
countries except the United States and
that part of Great Britain called England.
It exists in Scotland and Ireland, as we'll
as on the continent of Europe. Bank
notes secured by assets not under the
control of the Issuing bank are the very
rare exception to a general rule"
Mr.. White devoted much consideration
to the Fowler bill, embodying the princi-
pie of assets currency before congress
last winter.
Assets currency said Mr.. White,
sought to be better than government
= consist of the circulating properties of the
country. If these assets are not good,
nothing is good
Charles G. Dawes spoke in part as fol-
lows:
whether branch banking is right or
wrong as an economic principles; prac
tical men, we can make up our minds at
the outset that the public will have
nothing to do now with the branch bank
ing ideas, and that to couple it with an
other measure of currency reform in any
plan of legislation, will be, to injure the
chances of both. The most of the argu-
g, ment for branch banking assumes that a
community can be as we'll served by an
agent acting at distance under dele
gated authority,-as by an independent To-
cal institution possessing full authority