Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-12-17
Comptroller of Currency Asks
For Central Institution in
Washington at Once
RECENT FURRY BANKS FAULT
Ridsely Says II Was Caused by Lack
Of Confidence in ThemseIves-Comp-
troIler Makes Recommendations in
His Annual Report to Con-
gress

Washington, Dec. 17.-Urging the es-
Establishment of a central bank at Wash
ington as a means of securing a more
elastic currency system, Controller Of
the Currency w. B.. Ridgely, deals at
length with the financial situation Of
the last few months in his annual re-
port. submitted to congress. The on
troller declares the step must be, taken
soon. He unqualiiedly recommends
the central government bank as the
best system.
In referring to the cause of the re-
cent financial stringency, the controller
declares it was not due to the failure
Of a few individual banks nor to a
lack Of confidence Of the people in the
banks, but to a lack Of confidence Of
the banks in themselves and their re-
serves.
The report says In part concerning
present conditions.
"A very rapid increase in circula-
ton has taken place since Oct. 81,
1900, amounting on Nov. 80, 1907, to
over 1924, 000. 600. OF this increase,
SAG, O0O, 900 occurred during November,
1907.
This increase during the month Of
November, was due to the efforts Of the
treasury department to increase the
circulation to meet the special emer-
lency. 1t IL quite probable that If this
crisis is followed by a general reduce
ton in the volume OF business, the
volume Of currency may become re-
dundant, SO that 1t LAY be very desir-
able to have this circulation retired in
order to prevent possible export of
gold. This makes more evident the
necessity of a change in the law, by
removing the limit on the amount Of
currency that may b. retired in any
one month by the deposit Of lawful
money.
Facilitate Currency Retirement.
ION this account the controller
would again most earnestly recommend
that this section of the law be re-
pealed, and that the amount of bank
notes which would be thus retired in
any one month be left to the discre-
ton Of the secretary Of the treasury
and the controller of the currency.
Certainly since as long ago as the
date Of the San Francisco catastrophe
there has beer no lack of warning
indications of financial troubles n
possible business disaster. For at least
ten or twelve years there has been an
era of advancing prices and great in
dustrial commercial and speculative
activity in all the countries of the
world. Credits have increased and
~, ,lf{p1inl until tho LIMIT hoS hnor
reached in the amount of reserve
For at least two or three years,
however, it has been more and more
evident that there must soon be a
s~lackening of pace If W. were to avoid
a general and universal crisis in fin
ancial and commercial affairs. These
conditions have been world wide n
not by any means confined to the
United States. Crises of more or less
severity have arisen in several I'M
portant countries. AS Is always the
case when there is a demand for liqui-
dation, it first manifests itself in the
stock market. Merchants and manu-
facturers of the highest standing and
credit have found it more and more
difficult to secure or renew loans and
the rates have risen steadily for
months past.
What Started Stringency.
with such conditions existing we
approached the autumn crop-moving
period, when there is always more or
less disturbance Of credits on account
of currency shipments and withdraw
ais of balances from the reserve cities.
For a time it seemed as If there were
good reason to hope that there might
But during the month Of October the
collapse Of a highly speculative corner
in stocks, dealt in on the Curb" in
New York-not even listed on any reg
ular exchange-brought suspicion upon
an old, we'll established national bank
in the city Of New York. Altho ex-
aminations by the national-bank ex-
aminers and the New York clearing
house committee showed this bank to
be entirely solvent, with its large capt.
tai and a considerable surplus still be-
yond question intact, public interest
had been aroused to such an extent
that runs developed in New York city
on a number Of other banks and trust
companies and some national banks
between which and the bank first under
attack there was known to be commu-
nifty of ownership and management.
The national banks Of New York city
were all found to be solvent by the
clearinghouse committee, and being
supported by the clearing house banks,
none failed.
But unfortunately, a few other
banks and trust companies were not in
such good condition, and many of
them, not being members Of the clear
ing house or n other similar asso-
citation, were not so well prepared for
cooperation and support of each other.
The Knickerbocker Trust company,
with $1,000, 900 of capital and s4S,3S7,-
900 of deposits, closed it's doors on
Oct. %, and this was followed by a
large number of failures among small
err banks and trust companies. Dur
ing the months of October and No
vember ten state banks and trust COM
panies, two of which have since re-
sumed, closed their doors in New York
city and vicinity. There were long and
serious runs on two large trust COM
panies, which were only kept from fail
ure by the support OF the other trust
companies, and the clearing house
banks. One national bank, the First
National Bank of Brooklyn, which was
clearing house agent for two large
trust companies in Brooklyn which
L-1 z.Y.S u -. ~.