The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-11-18
PROPHETIC WORDS.

Before the Nebraska State Bankers
association in Omaha, Sept. 10, George
+. Roberts, president of the CONNER
cial bank of Chicago, delivered an adj
dress on the subject, "A Central Bank
were given in these columns Saturday.
His words WEI. for the bankers and
people of the middle west but they APP
ply with equal force to the northwest
and are worthy of reproduction, par
ticularly at this time and in view of
the fact the address was delivered just
prior to the breaking of the financial
storm.
The entire address cannot be printed
in one issue but further extracts will
appear in order that our readers may
have the advantage of the opinion of
one of the best financiers of the cOun-
try on our monetary system.
There is another ana more di-
rect way in which the bankers of these
states are interested in general pros
perity-and that is a curious result of
your own prosperity.
Your people have been paying off
their debts and occumulating money in
the banks. You no longer need help to
move your crops and carry your mer-
chaLts over the dull seasons. On the
contrary it has become a problem with
you 10 find use for your money. The
home supply of capital has increased,
the home demand has relatively de-
clined, and you have had to go outside
TO invest your deposits. Today we
have the strange spectacle of deposits
belonging to the farmers of Iowa, Ne
braska and Kansas being loaned by
the millions to merchants, manufac-
turers and stock operators in the east.
This is ar interesting developme mt
and l congratulate you upon it, but
what is to become now OF your boast
that you do the safest banking bust
ness in the world because farmers are
the safest people in the world to lend
money to? You are competing now
with the eastern banks for their GUS
toners, and you will have to admit
that you at least take all the risks they
run, who are on the ground. You may
call this financial independence: that
is your old point of view. 1t is custom
airy for debtors to regard creditor as
independent, but when a debtor be-
comes creditor he finds that it is a
question which has the greater occa-
sion TO walk the floor And when a
man becomes both a debtor and a
creditor, as every banker is. he comes
TO a very complete comprehension of
the anxieties of both.
Now l have no thought of making
an attack or. commercial paper, or on
the policy of such investments by
country banks. If selected with care
and on the advice of parties who make
IT a business to keep posted, there is
no reason why country banks may moi
carry a reasonable percentage of this
class of loans. But it is a new de-
velopment and there are great possi-
bilities of mischief il. it, and it in
wolves the western banker in the gen
eral eastern situation to a greater ex.
tent than he has ever been before.
Within. the last year the purchas sc
of commercial paper by country banks
have been much greater than ever be.
fore. Their deposits have been large
and they have gotten over, to a great
extent, their first timidity about THIS
class of loans. The effect has beer. to
suddenly open a new channel to 6
great many borrowers. and it has en-
encouraged and facilitated the expan.
sion of credits. The average man is
quite ready to borrow money to ex.
tend a profitable business. Conditions
have been extraordinarily favorable
for several years. 1t has been M
trouble for manufacturers or mer.
chants to sell goods. Most of then
have had more business offered thar
they could handle with their capita
and facilities. and the result OF thes,