The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1907-12-03
LAID BARE BY JACOB ScHlFF OF
NEW YORK IN SPEECH IN
PHILADELPHIA.
ENTERPRISE EXPANSION
Strained Credit Beyond Legitimate
~ Limit--Banker Selisman Wants
Central Bank--Denounce
Certificates.

which led to the recent financial crisi
in the United States and means fo
safeguarding the country against sucl
disasters In the future were discusse,
by Jacob H Schiff of New York In al
address before the American Academ.
OF Political and Social Science her,
tonight. Mr., Schiff attributed tn
present trouble mainly to too grea,
expansion Of enterprise of every ma
ture resulting In straining OF financia
requirements and particularly ol
credit beyond legitimate limits. He
maintained that the so-called prosper
ity madness was developed not Ii
financial circles alone but in industry
and commerce as well. Mr.. Schiff
said the greatest care should be taken
in attempting to cure the disorders
which have resulted In the condition
of today. He did not believe that cur
rency reform, imperatively needed as
1t might be- could In itself ever set
everything at rights. Unless accom-
panied by simultaneous reform in un-
sound and illegitimate business meth.
DDS be believed that currency refrom
would be OF little avail. He foresaw
serious danger In law which would
provide for an almost unlimited issue
OF asset currency and declared that
the issuance OF any circulating med
ium based upon assets should be gov.
erned by some central authority,
whether 1t be a Central Bank or a
Central association of national banks.
He favored the Central Association OF
National Banks as against the Cen.
trail Bank, taking the ground that at
the present time the country is not
prepared to sanction no far-reacbing a
plan which, he said, would revolution
ize the entire national banking sys.
tenn. He said in part:
Too Great Expansion.
The storm which has recently
broken loose has not yet entirely pass.
ed. The causes OF the financial tron-
BILE which have come upon us are +,
hardly understood yet. To me 1t ap-
pears the answer Is no surrounded |
by much doubt. The origin of the |
crisis is to be sought mainly In too |
great an expansion of enterprise Of :
every nature. both corporate and in ,
diyidual. This as a consequence,
caused a straining of financial re.
quirements and particularly of credit
beyond legitimate limits. Nothing is
nrohah h1y On laruatx, r.o..ys.,.; ;tla f<.r
the breakdown, as tho obstinacy with
which new enterprises became foster
ed; in the enormous volume of bust.
ness which was developed in every 4
quarter, even in the face of steadily
and further in the stubbornness with
which it was insisted that the country
was SO prosPerous and rich that par
ticular caution and prudence were not
needed; the march forward was made
with a totally unprotected rear. II
Prudence Thown Aside.
Look only at the number of social
cd trust companies, called into being
during recent years, and which under
a false flag bid for and attracted mil.
lions upon millions of deposits, to be 4
used not for legitimate banking, but {
for illegitimate promotion, from which
funds could not be withdrawn when
they their return was asked for by
those 10 whom they belonged. And not ]
alone in financial quarters had devel- Il
,ped this prosperity madness--in in 1t
dustry and commerce-prudence had Iy
likewise been thrown to the winds. =,
The manufacturer and merchant le
wnen warned that he was expanding i
Too largely scronfully rejected the all. v
vice to go at a slower pace. His an r
swer almost invariably was that the b
lcmand for his goods was great; that b
his customers we're in good condition n
and that anxiety and complications j.
sxisted only in Wall Street. He over s
ooked the fact that the basis of ID
arge volume of business, which he II
hought he was doing legitimately. lri
'ested TO a great extent upon the very Il
of euoerprisc repre- M
euted by the initiation Of corporate h
securities. he was criticIsing. aud that n
he collapse in security-values woul1 h
lave inevitably to be followed by a n
breakdown of the general business of m
be country ol
Reform Of Little Avail. lu
And now as q psnsces for the Ills n
nder which We are suffering. sud III
en- demand has sprung up throughout "
he country for currency reform. Let n,
. be said. however. and well under.
TODD. at this jupcturs, that currency
eform. imperatively needed though IL
! Is. can in itself never furnish pro- IL
ection against the consequences Of ei
nsouBd and iIlegitimate business
ssthods. A property constituted cir O,
dating melium. can furnish in :