New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-11-14
BANKERS SESSIONS END.
CALDWELL HARDY. OF NORFOLK,
q ELECTED PRESIDENT-A PAPER on
FINANCIAL CRISES"

,
dress on Financial Crises by Representative
Theodore r. Burton of Cleveland. Indications point
10 San Francisco as the next place OF meeting The
selection NLl be made at the meeting OF the eNecu-
tive COUNCIL in NeW-York April The delegates
were slow assembling to-day After prayer by
the Rev. 1GoF. Alexander. The call OF States for
hye-minUto Gtks resumed California In
yited the conVt ntion meet in San Francisco. and
Washington inn ited il meet in Seattle. The
nominating conn aittee composed Of delegates from
different States submitted The following nominal
tons:
For president, caldwell Hardy, president Of the
Norfolk National Bank. Of Norfolk, Va; first vice
president Frank g BiyelON. president OF the First
National Bank OF Milwaukee; executive council.
Trus, and safe Deposit COMPANY Richmond, va
~ the RepGhiic. Chicaso. D. sloan. president Of
The Lonh coming Savings Bank. Homecoming. Nd !;
tionai Bank. Dcs Moines. Iowa and James T
Hayden. president Of the Whitney National Bank,
NeW-Orleans.
The executive council elected f. F. Swinney. OF
Kansas city chairman George F. Orde. of Chi
cago. treasurer. and Joseph G. Brown of Raleigh
X. g.. membership on the executive council IN
place of Mr.. BiEclow.
yioe-presider,4s. representing each State in the
convention were also nominated A committee
composed delegates representing the various
state ASSOCIATIONS also presented nominees for
the executive couIscil as follows:
A Il Wigein 1rice-president Of the National
Park Bank, New-Aork; CharlSs l.. L; Fa Ii as
sistant cashier Of the capitol Aa19hai bSHi LII
ESehanee Bank Dallas TeT; L R51G o DTake
a a crane. cashier Of the National Bank OF
Commerce Minneapolis
The following telegram was read from Secretary
Shaw.
Please convey my greetings and best wishes
10 your association and my reyret at not being ape
10 be present. ] certainly hope thar wheh Stat
mated through Commerce and thar Rr1ion Of our
common country most favored by Nature nay NAY o.
fi tg al last e4D1' S"1' ~
Mr. Burton in his address. after dt hnlhs me
terms financial crisis depression" and pow
erty" and making the point that crises ana oe-
pressions severe in countries which nom o,-
cade 10 decade show the greatest incrt ase IA
wealth and material prosperity. continued IL part
as follows:
In order explain this singIlar
surfer most from crises and depressons, II Is lA
sSse can BE- traced TO the inevitable changes
which characterize modern industrial ana md energy
OF progressive peoples. These changes require the
constant ABSORPTION Of exceptionally large amounts
of capital i'm great enterprises the completion OF
which requires considerable ,uHgs "a os",taiilo'
This class of Investments disturbs The normal
me, Sisor re6wreS for early utilization. illustrations
may be found in such instances as me - Hn6ssc
funneI or the underground railway in New-1oTk
Ns6ments which are made necessary 10 meet some
demand Of public utihty OF COM ~ -c,ro6s
Of reduction or manufacture Occasioned by inEei-
reqiirc ne r,ea CHANCES require the
utilized for prior demands % production Ms1tI :
and appliances which have been used TO furnish
supplies are abandoned the scrap heap, and
great Investments OF capital are Iost Az 54ei
Of this progressive tendency Is the uneqlzal oere
opment of invention IN different lines ana sre1s 7
tacJre man III ,rIIo bevSe different lines
of production: too much is produced OF some
Vspeement also. when there is an increased de-
mand for the necessities and luXures OF life there
incidental tendency 70 oVeractlon. or TO en-
fskngs manifes1ing itself in seasons Of expansion
The course Of advancement is marked by de
rnand for increased production which stimulates
prices. then by a great increase in the equipment
for production. and later by an oversupply, which
causes prices to fall In tracing the course OF
these disturbances prices almost always en dg
comes when, instead Of demand greater than the
SeF e g fiaPRy The market Man1fseuTeT and
traders confronted 10y slower sales and by d.
In the banking business the visible indications %
the approach Of crisis are increase or loans
and discounts. that is. an increase greater than
that which IS required by the ordinary expansion
least Of deposits not based discounts: by rise
money; also by decrease of specie and OF bank re
healthful financial conditions reverse the
relation between specie and loans. as shown by the
last century this was the infallible indication.
While this same indication now forecasts me @p-
same conditions which have caused its diminished
yio ~ financial reistions and the recogn:tion
~ general interest which renders 1t desirable
that the stronger should support the weaker. and
all should unite in giving attention TO localities or
interests where disturbances exist. As result.
assistance is rendered where support Is needed IN
stitutes for money, which diminshes the strain on
capta invested n the banking business the
TOM of increasing the rate of discount at a zine
when gold reserves begin to diminish and. as i'm
portant as anythhe the siedtei shiii anu n Uue0o
In he consideration Of crises in our own coun-
Try il Is necessary to take into account certain
..xcepional conditions which have existed or which
now exist here Among the most notable causes
Of crises in the United States IN the past has been
The lack OF certainty that paper money would be
redeemed in specie. and in the standard OF value
whether IL should be gold or silver. Great losses
and great disturbances have arisen from the evils
a irredeemable paper currency. further injury
has arisen from frequent changes ana constant
agitation I'm regard 10 vital matters of economic
fiscal policy such as tariffs and the issue OF
paper money. Happily. recent legislation has given
assurance OF the maintenance Of the gold standard
and public sentiment has unequivocally declared
against sudden changes In economic policy
The notable defect at the present time is the
absence Of elasticity I'm our currency with the re-
money are required and the tendency TO specua-
ton when money is redundant. Ths function of
the Treasury as a bank OF deposit also has an in
furious effect, because OF the tendency lock UP
money in the government vaults when it is most
less supply would be sufficient
remedy for these two conditons-the absence
Of money I'm the Treasury-has been advocated by
those who say that the government should out
81 the banking business. While the proper Gus
tody OF government money presents a different
problem. II would that some method might
~ equal as possible, from month month. might
be retained by the Treasury, and the balance made
part OF the circulation.
For the practical management OF banks with
view 10 prevent crises no rules be formulated
neteF man NOSE stated by Mr. Bagehot; first. that
IN the time OF alarm loans should only be made at
very high rate OF interest This course he says
W. oleIste a. heaEy nne on unreasOnab BILE tim
idity and VIII prevent borrowing out OF unneces-