The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-10-29
WANTED: COMMON SENSE.

A strange situation is confronting
the business world, and it is up to the
people at the grass roots to exercise
their common sense and saneness, and
thereby head off serious trouble.
New York banks have started the
trouble by adopting a clearing house
certificate order. That is, when a New
York bank owes another bank, in
stead of sending it the currency on de-
mand. it issues what amounts to a
certificate of deposit.
Thus If a Kansas City bank has a
deposit in New York and wishes to
withdraw part of it in currency in or
der to meet local needs, New York re-
fuses to give up the currency. Kansas
City bankers fear they will not have
sufficient currency for their needs, and
they also adopt the clearing house GER
tif1cate plan. An Oklahoma banker
carries a deposit in Kansas City and
he wishes currency to pay the checks
issued by cotton buyers. He makes a
draft on Kansas City for the currency,
but Kansas City refuses to send it.
Result: Oklahoma is afraid it will not
have enough currency to pay its
checks, and all Oklahoma banks are
closed for a week by proclamation of
the governor. The same thing that
has happened in Kansas City has been
done in other large cities.
In other words, New York has
started a species of reputation. New
York owes the rest of the country a
large amount of cash. Every bank in
the country of any Importance keeps
large deposits in New York against
which to issue drafts, but New York
refuses to pay cash-the currency-on
such bankers drafts. New York thus
frightens other financial centers-and
an endless chain of trouble is started.
That is, 1t will be an endless chain
unless good judgment and common
sense on the part OF the public pre-
va11-and this common sense ought
to be exercised especially right here in
Kansas, and in the west generally. in
order to restore confidence. The west
has enough cash to run it provided
there are no runs on the banks-and
that is where the people at the grass
roots can show their common sense,
by not precipitating a run on any |
bank
The suspicion is bound to arise that |
this situation has been purposely |
brought about by the men who run |
New York's finances. It is frequently !
that the big financiers who |
control Wall Street and who hate |
President Roosevelt have been trying |
to create a panic in order to discredit |
the president and his policies. Wall |
Street has been screaming that Roose- |
Welt has destroyed credit but the |
country has been going right along |
with its credit unimpaired, and the |
only place where the panic has been |
felt has been in Wall Street itself. |
The rest of the country has laughed at
Wall Street and has shown no sign of |
getting frightened until this repudia- |
ton idea of Wall Streets was started. |
OF course it cannot be stated posi- |
lively that this trouble is the result of |
a deliberate p1an-but there is the |
situation, and the possibility. Wall |
York banks-owes the |
rest of the country vast sums in the
shape of bankers deposits. Wall
Streets rulers give the order that no
demands for currency from other
banks shall be honored. That fright
ens Chicago, st. Louis, Kansas City,
and other centers that Wall Street
owes, into passing along the same
order to the country banks.
Now If the country banks can be
frightened into keeping up this thing
ong enough, the trouble will have
reached the individual-the rank and
lie throughout the country-and that
s what the enemies of Roosevelt
would like to bring about. Then the
farmer will not be able to get his cash
o buy something when he wants it.
The multitudes of employees of fac
Tres, railroads and other big institu-
ions will not be able to cash their
checks in their accustomed manner.
The public will be made to believe
hat something is really at falkland
very interest that Wall Street can
each will set up the cry that "Roose-
-elt is to blame for destroying con-
idence."
So it is up to the depositors to keep
ane and cool and help the small bank 8
o resist the trouble. It seems to us
hat New York was unwarranted in
tarting this trouble. If the west had
tempted a similar scheme a few
ears ago when the west owed the ,
asst, New York would have yelled IRE {
till it was black in the face I
Quite likely if the rest of the country !
Ould dSIeSo ~ SO dhedu anu r
lew York. neither sending it cash nor {
skiing it for any but doing business s
" drafts, it might not have been t
ecessary to follow the Wall Street I
Ian, but the bankers generally be- !
eved the interests of their own COM J
nunities called for the certificate G
the result is that the GER t
ificate plan is in force in all cities.
"a ha he
ry people refuse to be frightened by !
HJyr for fa1x- = will oil he :