The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-10-29
TUESDAY. OCTOBER %, 1907.
Neeessarr Remedial Measures.

There is some danger that in appor-
ltioning blame for the New York crisis that
has happily passed its worst phases, 50
much emphasis may be placed upon the
'culpability of individuals that certain con-
'ditions favorable to their misdoings may
he ignored, or, at least, not given the Sc
riOus consideration essential to permanent
reform. 1t will not do to clamOr that
Roosevelt did it. in view Of the obvious
facts Of the situation; nor, on the other
hand. viii it answer TO make scapegoats
of spectators and dishonest bankers,
when conditions favorable to their opera
tions have been created by the banking
community and have been allowed to con-
tinue without conspicuous effort 10 alter
Them. The important thing now is to
effect a permanent reform in these c0ndi-
tons, so that the way of the merely
speculative fnancier may be less easy in
the future
A splendid beginning has been made in
this direction by the New York clearing
house committee, but Il is recognized by
all observers that what has been done
must be supplemented by further remedial
measures, applicable by clearing house
agencies, to which must be added strin-
gent legislation for the supervision OF
all banking business. The State has duty
that. We imagine viii not be overlooked
by the vigilant Hughes As to the re-
mainder Of the remedial programme, the
New York Times offers three excellent
suggestions.
''Flrst-The more regular, systematic and careful
use Of the power already recognized in the clearing
house to keep close scrutiny on the general policy
Of is members on the class Of business DONE with
the nature and extent Of the obligations and risks
incurred. and, in connection with the use Of this
power. the exercise Of a practical supervision over
the character Of the directorates &C members.
''Second-Ihe inclusion Of the trust companies
within the organization Of the clearing house with
the rights and privileges accorded 10 the banking
members. and with c0rrelatiTe responsibilities.
"Third-The adoption Of a plan having the aim
Of the plan Of the American Association Of Bankers
for the quiet issue Of currency at times Of extraod
nary demand, under conditions that would insure
its absolute safety and prevent anything Ike danger
Gus OF permanent imitation"
OF these measures. the last comes with
FSn the purview of national legislation.
That the desirability Of currency reform
has been emphasized by the financial
TROUBLES of the past week is, perhaps, one
iof the most hopeful features Of the situa-
ton. Senator Elkins has promised that
ian effort Will be made during the coming
lsession to adjust our currency system to
.the demands of the business world, prob
Eably along the moderate lines embodied
lin the recommendations of the American
Bankers Association. The object lesson
in the need of an emergency currency.
isupplied by recent events, it may be
hoped, viii not be lost on Congress. which
has been reluctant hitherto to act in the
face of the opposition from various
sources that always makes itself felt
when financial legislation is up. When
Congress provides a flexible currency, re
lsponsive TO the needs Of the business
community, in addition to the local re-
formative and preventive measures now
being supplied in the financial district,
much viii have been done to diminish
the probability of a recurrence Of a money
panic such as threatened our fabric of
national credit during the last few days.