The sun., 1907-12-03

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|l PHKLADRIPHTA. Dec. THAT the lesson
NJ The financial crisis from which the country
x Emerging Is that there should be q strong
tNnfral Government bank was the con-
't1ans expressed tonight by half dozen
Nf the most eminent financial authorities
~ the country az the meeting Of the AmeTi-
an Academy Of Political and Social Science
The announcement that the meeting
would be addressed by such men IA William
NJ Ridgely, Comptroller Of The Currency:
i. .lacob IT, Sohin. Isaac n. SeiigmaR. Frank
Nk. vahderllp and Cha rles Treat. Treasurer
p4f the United States. caused tickets for the
naeetings to be eagerly sought by the
nuanciers and business men Of the city.
Next to the general acceptance OF the
9 IDEA Of a central bank. the next most inn
N portant point agreed upon 6N the speakers
Was that most of he causes TO which The
panic has been attributed had really little
. 10 do with Il.
That the trouble was world wide aud that
" if was owing to the great aud IN many cases
unwarrRnted expansion Of business in this
sountry that made the United States the
4 frst victim OF the breaking Of n long gather
'5ing financial storm. was the general way in
Y which the panic was accounted for.
~ Secretary Of the Treasury COrtelyOu. who
B had been invited, sent his regrets in tple-
& Rram in which he said the Treasury had
(. been extending all possible relief and that
he looked for the immediate future 10 bring
more gratifying results.
& William h Ridgaly COmpt roller ~ the
Y tCurrency, was the iirst speaker. lie strongly
" advocated the cent raj Government taHk.
E In part Compt roller Ridgely said:
N -The commercial and financial conditions
existing not ONLY in the United States but
v fhrou xhout the world in the early part Of
x October. 1917. which made PANE or crisis
possible were the accumulated and COM
4 posite results of the business Iransa ct ions
of many years. reaction 10 business
was due and inevitable in fact it had been
In progress for some time
N n IL had not been the collapse Ut the
CORNER in United Copper stock II might
have come from the W We-'tinghOuse receiver
nhip a few days later. ar from almost any
one Of a namber Of similar developments
which were not only possibl" but probRbls.
There never j. any necessity for a panic.
and this Of all others. should never have
taken place because the conditions did not
Justify II in any way.
Laaat of all should We have a panic among
the hanks aud this particular pauic might
easily have been avoided and ia il place
3 we might have had "A more relsu1able and
orderly read just ment Of credits and values
!, II we had had a better system ~ currency
and a better system Of banking. both ma
not better banks.
we would alSp have been in very
much better position II the relations be-
tween the business world and the Treasury
Depart ment had been on different basis,
Z II the Treasury Department had been
entirely cut Of business and free from
responsibility os 10 HIsiness conditions.
ns Il ought o. l'r.
IF our system had been such that The
rOuntry bank first. ben the reserve city
bank and finally the central reserve city
bank could have supplied some form "
credit notes in payment of heir deibOsits
the situation would have been entirely
giifereni. y
-if we hal had such a system Of notes
rs they have in Canada. for instance, which
expaids quickly and automatically in the
fall of every year, when this demand comes
and contracts just IA surely 10y February
u each year there need have been uu
apprehension in regard To the crop moving
lteriod. There would have been no varia
lion in the volume Of credits al all. Reserve
money in the banks which was ample for he
deposits. would have been ample for he
credit notes ii they had been available.
-The way 70 cure this trouble and pre-
vent occurrences Of events of his kind Is !
10 give the banks and the eopie who are
their depOstors some pro- or system OG !
elastic credit notes aud 10 compel banks ,
10 carry against these notes and their de- !
posts larger reserves on hand ln cash. and !
that proportion, if any, which they are per-
banks where they will he surely available !
THE experience Of all the rest Of the
world in every important country has
shown that the best wny Ia accomplish
\ this result IL 10y means Of a strong cent Al
Government bank which will handle the
finances Of the general Government act az
reserve agent for other banks anl have
the sole right to isslIe credit Innk notes;
all under Government control AMI subject
10 severe Government supervision"
Nnlh .kaVe 49, t. l..
nee National Bank of New York. told
Of the various crises Of the past and the
remedies which had been applied Ia ad
the situations. As 10 the proper solution
for the present trouble he said
~rhe ma gnetiC pe'Adle does not point more
unerringly To the pole than the clearing
house certificate points to "A great central
bank and dodge ~ we may, and ~ probably
we will finally. we shall come back 10 it and
IA IL as the solution Of all our difficulties.
But such bank ln,lst be organized prop
erlv or il will never gain public confidence.
The Government must Ire represented in il.
but the dominant power must reside IN \
board OF directors to which the most emf
nent bankers and business men shall be
chosen.
-Let the clearing houses Of the grea,
central reserve cities nominate hose Iii
rectOrr and YOU will have "A governing
body a. intellectual aud IA respected as
the Supreme COuTC OH the United SttIes."
Isaac n. Sell gInan Of New York advocated
the establishment Or "a central bank az u
remedy for financial ills. tie pOinteI Out
that the system exists ia all European
countries. Vhere these central national
banks. although not Ownsd by their Govern
ments. are controlled by government re-
presentation in the board III directors and
also by the dominance of the governmental
policy.
Mr. SeIgman advocated n bank owned
Jointly by the Covenant aud the national
banks The Secretary OF the Treasury
and the Comptroller Of the Currency should
be represented ON it's board
The Treasury funds should be deposited
with the central bank. and the Government
bank should have the power TO issue notes
IN certain proportion y its gold reserve or
capital this bank to dcposir funds with the
clearing housss ana national banks against
United States bonds and other approved
security as we'll ~ commercial paper and
bankers bills with proper margins.
-Such plan, said Mr.. Selgman, would
Introduce the necessary element OF nexi-
4 bility In our currency system which ia now
entirely lacking and would not be exposed
10 any Of the objections which were brought
against the various plans Of the asset bank
currenoy.sl
In closing Mr. Seigman made this sig
nifcant statement which indicates that all
HOr finn nsviE.ra MT ta