The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-11-19
CENTRAL BANK or ISSUE.

Continuing with the address of Geo.
f. Roberts, presidensof the CONNER
cial National bank of Chicago, who
discussed the present monetary system
in the United States, as published in
yesterdays issue of the Statesman,
taking up the subject of the annual
money s.ringency the speaker said:
Il want to make myself clearly I'M
derstood here. l don't say that the
mere fact that money occasionally be-
comes tight needs to be remedied.
Money will become tight under any
system. and Of course there must be
some effective check to borrowing. 1t
is not the fact that money becomes
tight once year that is dangerous,
but the fact that the country comes
every year practically to the end Of it's
resources. At this season in every year
we are, in the language OF the street,
practically "all in," up TO the limit
OF The accommodations We can grant,
and are in such a state of tension and
anxiety that a break anywhere, the
falling down of a single great house,
might start a panic and precipitate
widespread disaster. 1t isn't safe for
the country, with its vast system of
credits, extending and ramifying
throughout all sections, and all resting
upon slender basis OF cash, to go on
in this way. What would you think of
a business man who regularly every
year exhausted his credit, came up to
the very limit of his resources and
risked everything he had, without any
margin for safety?
You would say he was not a pru-
dent or wise man. and yet that is
what We az a people do. l say that
there ought to be some way by which
the undoubted resources of this coun-
try can be made available in an
emergency; some way by which the
credit of the country, based upon solid
values, can be organized and CONSOLE
dated and brought to the support of
the business interests of the country
ST such a time.
1T is a commonplace to say that
money is not really wanted in time of
panic. Nothing is needed to break a
panic or prevent one but the. assur-
ance of solvency. a guaranty that the
money can be had when it is really
wanted. II. other words nothing is
needed to preserve normal conditions
but guaranty that the money can be
had when it is really wanted. In other
words nothing is needed to preserve
normal conditions but guaranty tina,
conditions will remain normal.
Il want to lay down another fund.
amental proposition. supported by the
experience of all countries, and that is
that the desirable check upon business
expansion is to be found not in an alb.
solute. hard and fast limit to loans
but in rising interest rae 1t is bet.
ter to stop a runaway horse by headins
him up hill than by running him into
stone wall. In the one case he gets
discouraged and slows down gradual.
Iy; IN the other, you have a smash.
up. In granting credits in this cour tr,
we generally pursue the smash-u,
policy. Our banks il. dealing with theiI
regular customers usually charge {
uniform rate of interest as long as the,
can loan at all, and then shut dowr
entirely. The call loan rates in New
York and the commercial paper rate.
are almost the Only exception to thi.
rule, and they are due of course to tn,
fact that the borrowers have no per.
manent relations with the lenders.
regular customer expects to be ac.
commoda:ed at the regular rate a.
long as accommodations are granite,
at all, and We go, as has been said
practically to the limit in the fall O.
every year, and have no resources ir
reserve.
1T is useless to expect individual
bankers to adopt any new policy as I,
their own funds. They are controlled
by competitive conditions. But Their,