The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-11-23
OUR NATIONAL PROSPERITY.
4 Very Sug sestive Reply TO the Late Ad'
dress Of Mr.. y. 4. Vanderltp.

dress Of Mr.. y. A. Vanderbilt.
From an address BY Mr. james n. Dooep'
D,stinpuished Member Of the Richmond blr'
At this particular time. Mr.. +. A. Vanderip'
vice. pre- ident OF the National CITY BANK
has published very remarkable address
having for it, subject the financial conditioh
OF the country. which has produced a pro.
found impression upon the public NINA anu
materially contributed 10 the alarm which
precipitated the recent enormous liquidation
II Mr. Nanderip'- statements and the IN
f"renc"- therefrom are accepted "a correct
our utional bank, stand convicted of reck-
| les, expansion and msinsnay"m"nt.
He charges that the depo it, OF the national
! banks that f. their indcbt' dne-~ TO IN" public
| hnv. incr"a I'D since the beginning OF 1899 by
the eno-mou- ,um OF sl3Ooo 'o ooo, th't TINS
indcbt sdnes, now amount TO $4,000 Ho.W"'
| vhilr tho legal tenders and god held by the
bank-, which he calls the bs~i- OF thu pyramid
| OF indcb' dn"Ss. are row only sJ0s,"ooooo'
| again I siO1 OOO 900 IN isn
| He charges that IA" national banks have
! thus enormously increased their indebted
! ne.s. and have Gt the same time reduced Their
! bssi~ OF credit
| While this l. not true. the language en-
ploycd by Mr.. vanderlip does present II TO
| the public as truth. and he seem" to desire
| TO have II accepted a. truth.
| Tho fact l. that the s5Os 600 600 OF gold and
| legal tender held by the banks are only part
of the blsi, upon which the great pyramid
| of depo it rest for safety. The banks are
| the largest borrowers OF money in the world
| The deposit, which they hold for the public
| constitute the bulk of their borrowings.
Let u- now imagine John Smith applying TO
| bank for loun OF $4,000. The president
| asks him MIR Smith. how much have you
| increased your indebtedness since 1892 Mr.
| Smith replies, -slOoOOO" well, now. MI
| Smith" the president asks, how much have
| you increased your gold and legal tenders
| since 1880, that Is TO say, the basis OF your
credit" Mr. smith would have to admit that
he had not increa sod his took Of gold and
legal tenders. but would explain that he had
/ made since 1899, s.C0,ooo-inveSt"d in bonds
and merchandise, and regarded that and his
Other assets a. the basis of hi, credit.
| Likewise. while the banks hav" increased
! their borrowings from the people in the
shape OF deposit, and may not be able to
show an increase In their stock OF gold and
| legal tenders. they can and do show an i'm
| mense increase In their bills receivable, bonds
and stocks and other assets, which, together
with the SOS 100000 OF gold and legal tenders.
make up the basis OF the vast pyramid OF
| credits.
Itthat is no, true, and il II is true that gold
and legai tenders are the only basis OF this
pyramid OF indebtedness, then the banks are
roc klessnes- kin to criminalty.
| Mr.. Vanderlip finds bear argument in his
| statements that our exports OF manufactured
goods reached their climax two years ago
and have since been fteing of; that our i'm
portS have increased from $500 100000 in is9s.
TO 5000 oco.O 900. in 1902. that in spite OF that
tremendous balance of trade which Govern
mert reports showed in our favor a balance
running rs have said. up 10 an average OF
almost $500 OOO. 900 a year. We do not seem TO
have any unusual command upon int"rnational
credit, ou, We are a, r, Mord o. paCl
and that now. in the midst of extraordinarily
bountiful harvests, and al the season when Il
movement of gold in this direction mlght nor
maily be expected We are concerned lest Il
high rate of sterling shall leadto cold "Nnorts
| Let us yamine these statements seriatlm.
| Fir-t-1s it true that our exports OF manu-
featured goods are not increasircp ~
The fact ar" a. follow: For the nine
month. ending Sept g. 1900 90, our exports oi
nne months. 1901. ?95.660.55t. FOR same
nine months. 1902; sSii ,$o2,i Az!
! II will be seen that, while 1t il true our ex-
ports OF manufactures fell OF from 1900 to
1907. this year they have increased IN nine
months bout SO. 900, 600. or at the rate OF
$50. 900. 900 per annum pretty healthy In
| crease. - A..
| 900 OpD in 1902, while In 1908 they were only
5000 goo sno The year 1895 was the first year
OF prosperity, succeeding long period 81
depression in business and stri economy;
our people were comparatively poor and
we're exercising great conservatism in ey-
pendtures. our imports were accordingly
much greater our imports are IN 1907 THAN m
is9s, hut are our present imports so aonor.
| mallv lnrgn az to con 'ifut' menace 10 ouf
prosperity? our imports we're:
| 1870 ss23 es 80
1881 Isl l!5t'
ia? sa7 oS7 oo
Thus il appears that. not withdrawing our
enormous increase IN wealth, which MT. Van
| derlip figures Mt $4,000 900, our import
last year are about the same they we're in 1893
Instead of being bear argument or a
to our fMrs cone ,r s Nth r onr n
| Crea ed wealth i wonderfully conservative
and ,econIomicgl ;how,pG for The Amssr i;ra
ton when we consider that in isa3 our exports
we're only soo7 ooo. 600, while in 1902 they were
,i"e vears our exports have increased $500,
Opo 600 while our imports have not increased
More especially i this to be admir:d when
| creos. i'm our imports from lsas TO 100? was
NOT composed of luSuri"s. but OF those raw
! materials which are used by our own factories.
"'TTtird|That we are a considerable debtor
| 70 the worlds exchanges, and IRE concerned
lest a high rate OF exchange shall lead to gold
With respect to rold exports, assume that
no one who Is capable of forming judgment
S dp" the los Of few millions of gold, for
nnv other reason than that We cannot spare
any considerable amount OF cash while we
| arc engaged in moving enormous crop~,
The main bear argument TO bs noticed i
IN I rot withstanding the magnificent show
ing made by our foreign commerce, We are
| owing to Europe IA larg" floating debt.
How does this floating debt ari Sc, and for
| what do we owe foreign countries ooh
M this para graph Of MIR Nanderlip's address:
| prices of securities advanced along with otne
priccs aud attracted the holdings OF foreign in
yes,ors until we swept the Continent OF Eufop'
almost clean OF our stocks ana ponds, and greatly
| reduced the holdings Of fnVllsh investors
This sweering of the Continent clean OF ouI
stocks and bonds and the great reduction
OF the holdings OF English investors moan
that we have taken w the vast debt, which
we formerly owed abroad and on which ",
> M from $50 600 600 to 500 900 an annually
II seems to b" the generally accepted opinion
In financial circles, that We have Relieved
: Europo in the last few years, OF about 81 =
coo. 900 900 OF our stocks and bonds " can
scarcely be held TO be- an element OF weakness
in our financial position, that instead OF
owing Europe 81 900 100000 in stocks and
bonds, owe, say sl0o,Wo,oOo, or There
abonts Of floating debt
, ! In iSq7-Qs We imnortcd about sos, 0o0. Oct
: of cold and that j. about the amount OF
= excess OF gold imported since 1897
r Mir VANDERBILT asks: If a si0o.0oo 900 i'm.
r mort ion of gold can serv" as basis for an
n | EXPANSION of 20 many millions OF deposits
| and loans. what will an expectation OF 500
u OO0 40 mean -,
This can mean nothing else than that Mr.
2 Nanderlir wi-hes to create the impression
F, ! that the importation OF an excess Of abou,
! sInO oON Oc0 OF golf has led to the enormou,
K evanston Of business and prosperity In thi'
country, and 20 Intimate that the export AT ior
| Of a like amount VIII produce as important
= cons ,qucnc'S IN curt filing bus iness.
! l. arl 4,