New-York tribune., 1906-07-06

BANKERS on-ht = =, the nnancial centre; New York
A,hey ought to have well considered opinions upon
country looks to New York for this leadersbjp
fical S . lOIk bankers TO say that anything prac
reasons. come from some other quarter is but a
financial leaders Of New YorR 20 ssy tbt th the
popular prejudice against Wall Street is so great
and that II is useless for them to devote Thought
az ,lt Rtoon OBI 1ne solution OF which must, because
= 70 oner tut lame excuses failure to do their
Il financial disaster should ever come because we
pave @ IA Laed to enact proper legislation the blame
H9r u1@t olsaSter VIII lie against the bankers of
New York more directly than against any Other
than any others, have duty Imposed upon hen
se GUY ot LEADERSHIP They cannot escape the
cay understand that the financial leaders have thus
that failure stands out clearly against ha ok
sdOun,a , OF financial disturbance the will not
pe helpTul TO New YOrk's pre-eninence
To my mind We are in a lethargy of success We
side. Unexampled totals MARI the measure as ~
every phase Of industrial and commercial life we
so vast that it makes the financial operations OF
never before so fully or so pTof5ablv empIoved
I BUSINESS SINE was never more active. And So some Of
growth. e'oe' u neat" anu
UNDUE ACCUMULATIONS OF CURRENCY
bob PbFgy 1 1t is magnificent t 0rganzstion Of business
business condition impressed upon u.s. it is difficult
the financial pulse-bear may be an important warn
Ing. nlg., Inc pulse-beat Of abnormal money rates in
wan street. rates :hat abnormally low alb
noILhally nigh have recurTed and passed and il is
IS. perhaps. hard to believe that brief period Of
fN,a9 oVeTn99"ng bank vaults might in the end work
fabric Of business. We see undue accommodations
that must pay interest on these Swollen deposits
re-loan the money with nervous haste at any re-
tnFn tntn no matter how long; we know that funds in
th thls way may some day become tied up so that
does not @ % meet t an Unexpected demand put IT
sVeSas 0 bat seen 20 come WITH m4ch foTee 70 the
situation may be financial disaster
Even though clinical Thermometer registers a
degree or so too high temperature a strong
man may think it a matter which in his strength
seems to rest in the security OF an all pervadins
twoscore years ago 10 At then abnormal situation.
system has been prevented by prohibitions which
Civil War. In every other aeld Of activity we we
nave recognized that conditions made new
has not been permitted to develop SO as to Keep
PSe X;tS Ith IN the growth OF the work It has to DO
In the United States, and with the growth of the
the margin between the maximum and minimum
need for currency has widened That margin be-
De needed at one period and the least amount IKE;
development
At the present time there is reason for believing
that the country at certain seasons requires $780,
0rs nbe 20 @ s BUSINESS tnn
am talking OF currency, not Of credit; To meet
solutely provision in our laws. Our banknotes
increase or decrease in volume as result Of the
fuctuation in the market price of government
bonds and there is practically no relation between
our Banks are permitted to give freely to their
customers credits in the shape OF deposits, but
when customer wants 10 convert that eredlt INTO
the form Of crcuatng mote note he he can 83 be accom- &c %
bank its reserve money.
BANKNOTE AND BANK DEPOSIT ALIKE
believe the first principle to recognize is that
there is not an essential difference between @ RHR K
fbe form m Of currency Certain safeguards be
thrown around cireuatpg sit aoIe f 6,t i itb that
exception in view, this principle stands peneVe,
as perhaps the most important one to recognize IN
currency dscussion-that there is not an esSentlal
difference between banknote ana n PanH a,gb% TS
Under satisfactory safeguards, to be able to con
V55 One one otbeF tO principle that has been fatally lost
sight Of in half the discussions OF the currently Is
are certain bar TO an oveTissue OF crc9ISIs 9Hnas
wt5 an ASSET currency With adequate redemption
ABILITIES such thing is ineonceiVaoie d LEI any Any
idea Of providing absolutely adequate redemption
5%cIa+on caciltti+I dav beyond the time when bank
credit is longer preferred IN thaT fs I0FI FaS;
cuities of the inquiry are at once cleared away;
This is Of course no place 60r bawe 1o Man
to propose. The thing that want TO urge Is
ns f wee W Wish an ndenta
prosperity ana 1uEtneT 10 mon the bankers
OF New York in presenting plan for sucn a cur cur
forms. Perhaps the best one were it politically
possible. would be the question OF a goyeTnpmeHt p
bank having the power Of issue whose sole busl-
ness would be its relation with other banks ana
whose chief operation would be the rediGcountlng
FOR other banks I do not mean that an existing
institution could be metamorphosed into such a
central bank II would have to be freshly organ
zed from the beginning. its control would need to
be largely in the hands of the government and its
ownership widely distributed among banking IN
terests throughout the country The principles OF
a scientific asset currency could well be worked
out through the medium OF such an institution, as
the experience OF Germany eloQuently teStneS'
but they can undoubtedly be worked out In some
The fear which men so commonly have Of giving
a larger power Of note issue to small natona!
banks will largely disappear when the opponents or
asset currency fairly in their minds what
the will be of providing adequate redemption
facilities. That plan can be devised Whlch VIII
safely Kermit every national bank to issue GER
bonds l have no doubt. and am inclined 70 think
that II is along that line that legislation IS most
likely to be obtained, although perhaps 1t Is not
The thing OF which I absolutely certain, how,
ever is that solution of the whole problem could
be attained wisely, promptly and easily II bankers
would give a consideration OF the subJect any
thing like the attention which it merits. And again
I saw the responsibility Is on the bankers OF New
York You cannot hide behind Congress 10 avold
the responsibility You cannot shift the response
hity 10 the shoulders OF your associates IN the
West You are the financial leaders, and the re-
sponsiblty of leadership is yours
PLANS BRIGADE POSTS.