The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-09-20
CENTRAL BANK
Ex-UNITED STATES TREAS
URER R~OBERTS'S OPINION.
Believes the Experience of ALI European
Nations Teaches That Such an Insti-
tuition Is Required by Us.

OMAHA. Neb., Sept. 2O.-At the meet
ing Of the Nebraska State Bankers AS
ISOLATION here yesterday George S. Roberts.
formerly United States Treasurer, and now
president CT the Commercial National
Bank. of Chicago, made a speech in the
course of which he said:
There IS persistent agitation for some
change IL our monetary system which will
give a degree Of elasticity to it. I believe
such a reform is needed, and that the
need will become more and more impera-
tive as the country grows and as our
credits become greater in volume and more
and more differentiated and interdependent.
The effects of individual or local weak
ness are not confined to the individual or
the locality when conditions are strained.
There is a nervousness everywhere at such
times that is peculiarly susceptible TO
alarm, and the influence Of every unfor-
tunate development, of every mishap, is
cumulative as It moves along.
LAS soon as money is reported tight the
newspapers begin to feature 1t, gossip
turns to 1t and people discuss the possibility
or the probability of panic. This increas-
ing volume of commercial paper is one
more explosive element in the situation.
Suppose two or three big houses whose
paper Is widely distributed should fail,
wha would be the effect on country buy
ers? II it caused a general cessation of
purchases it would bring on more failures
and there is always danger of a general
demand Cor liquidation which will abso-
lutely PROSTATE the business community.
This timidity and constituencies Is very
largely due to the fact that we have In
this country no resource in the event OF
a panic. There is absolutely no give in
our monetary system. When an emer-
gency comes there is no help for the situa-
ton; a supply of money that Is ample for
ordinary needs Is inadequate for such a
time; there isn't enough to go around
and no matter how great the resources OF
an Individual or firm or bank may he
we have no way provided by which those
resources may be utilized to save its name
and credit. 1t Is largely the fear of this
possible situation which creates the tlmid-
ity and hegets the alarm.
II do not say that the mere fact that
money occasionally becomes tight needs
to be remedied. Money will become tight
under any system, and, of course, there
must be some effective check to borrow
ing. 1t is not the fact that money becomes
tight once a year that is dangerous. but
the fact that the country comes every year
practically TO the end of its resources.
There ought to be some way by which the
undoubted resources of this country can
be made available in an emergency; some
way by which the credit Of the country,
based upon solid values, can be Organized
and consolidated and brought to the sup
port of the business interests of the coun-
try at such a time.
II would adopt the general plan of the
great foreign banks, but / would not have
the central bank in this country do a gem
eral banking business. / would make 1t an
institution to do business with and for the
other banks. If you have any prejudice
. 800, &..A r. x.,Ar1 ,,~1Ao xyA Ia not anil
it a bank, but a central gency for the
existing banks, through which they are to
perform certain functions which will be
serviceable to them and to the community.
1t should take over all the government
moneys, just as the foreign banks do. That
would end the whole vexed problem of the
government deposits. Every bank in the
country, by reason of its stock in the CEN
trail organization, would have its. proper
tomato benefit from the government de-
posits.
The central organization should have
the privilege Of note issue up to, say,
800. 900, 900 and more under a tax provision.
1t should make loans only to Its stock
holders on good, live bills receivable as
collateral, or by rediscounts of paper which
they indorse. 1 do not believe it would be
wise for the central bank TO loan on bonds
or stocks at all. l think ii would be safer
to keep that door absolutely closed and
confine the operations of the bank to the
strictly commercial field, handling paper
WHICH, IL DdSeu On Sldple COMMUNITIES OH
their way to market. There would be no
danger then that its resources woul be
tied up indefinitely In unavailable assets.
Its paper would be constantly changing,
and the hank would always be in shape to
help keep business moving.
1T ought TO have weight with us that
every country of Europe has solved the
problem to its satisfaction, and all have
come to the same system. Nowher Is
there any talk of change. The central
bank, under joint private and public con-
troll, gives them an elastic currency and
manage the operations of the public
treasury, so that its receipts and disburse-
ments are never a disturbing factor"