The evening world., 1907-12-16
us. TOMAgE Up
FORBANK FAILURE,
/ BELMONT s PLAN
Should Be Free 10 Deposit.
Resources, .Exacting No
Collateral.
CARNEGIE FOR GOLD.
i !
Elastic Currency, With Real
Assets for Basis, He Pro-
poses TO Federation.
CARNEGIE Al FOR GOLD


: Park Avenue Hotel. jrmes spcyer
banker. presided In the abssnce OF Mr
Belmont. II was tho eighth annua
meeting OF the Federation.
Mr. Speyer. after reading a paper or
protecting Peoples savings which
was the subject scheduled for discus
Sion. Introduced Mr. Carnegie. WHO wal
received with enthusiasm
The ironmas,es said in part:
Panics Are Natural.
.,I.et VI dismiss the idea that there
y any cure possible for financial
troubles and rsnits These have shcif
I ruot In human nature. and are rs cer-
tain as the tides or the storms. as
essential for the regulation. clearance
and publication OF business as the
season changes arc for the general
health OF human life.
..rhs point that demands attention
Y tha, our banking system Is unlike
that of other countries. The present Is
no time to urge the complete change
We need. which IL the substitution OF
eoid for our reserves and currency
based upon assets. Instead OF upon
government debt. the false foundation
upon which VIC have built
.In othe. words, to NEE, unusual de-
t1ands OF buslness in excited times. In
Read OF the hard stone floor OF d~ninl
npon which they must strike and be
smashed. our banks would have II In
their power TO issue certain amount
OF emergency currency-tho soft pliable.
cushion. which would break the blow
and, as rule. prevent loss OF conf
dencs which precipitates panic. II our
financial institutions could promptly
meet. for ev.n day. and suddenly
call for unusual sums, panic would
somst.nes be averted altogether.
Mr.. Fowler has Shown that our pres
pnt dicreditabic banking system causes =
los. OF At least one hundred and nifty
millions Gf 1oliars per year from the un-
usual usual requirement that CURRENCY -bn Sc
sns,,n cnrea by. government m per cent; bonds
purchase these bonds Is Withdrawn
from actual banking facilities and !Iss
IN the vaults In the form OF useless
Currency Basis Assets, Not DEBTS.
Two plans have been laid before us
and. ! think. to our support. First The
pill tavosably recommended December;
Sst by the COMMITTEES on Banking and
Currency OF ;he House. Of which Mr..
Of the committee. Nov. is. last year. ep.
pointed by the American Bankers. A1so-
ctaIion, Mr. Hepburn chairman.
point ot the Issue OF emergency cur
rency based upon assets, Neither
touched the question sot gold reserves.
sfp sspa sai sots psnrs na se sass
ira issues Of notes shall be paid In gold
coin. which Is at east beginning
Two and one-half per cent. pei. annum
three FER cent. by the other for the
hrst 70 per. cent. of notes issued and
per cont. for the last Il IL per- cent
creased. but thi. il q ae,ali. some
minor chances Win no doubt be made
bv Congrsss." y a.
Mr.. Beimonts letter read In part. az
.nsr 90 Slm sst to ssff' ssl. ssF
my privilege to. -ay something. l would
ia / general way ,ndorse Mr. Hep
burns suggestions OF last year for n
III occurs 10 me. however. tina, there
will remain. Y not corrected = dis
,arSnx sssfnsnt 70 me s,aaltS o. Inc
en-, legal restrictions and limitations
ri.eed about tho authority vested IN
''If there If time when our financial
Institutions should be left In possession.
Of their fullest streagth and their secari.
ties, 1t is in such times as those We are
% Yet ii, ,he ,ss Government sap. ,his
strength To the extent OF the deposits
II makes Of Its funds, so that the relief
TO sorely contracted money market is
not free and healthy And why should
not the Government deposit al, its funds
not absolutely needed in It's treasury,
without collateral and protected by the
Same security that surrounds the ordl-
nary depositor In the natscaai banksy
From 1875. al the close ,ot the Civ!l
War. TO 1904. inclusive. the ayrsa sits num-.
bar as~pational banks In operation per
year mss s.s,. or nm aggregate fn-, tho
period OF l1f.e63 The aggregate number
OF faiiures In these forty years amount
ed to ois..y Bs. or n total percentage OF
i failures OF national banks In operation.
as bearing TO tho whole OF o,oios per
cent The aggregate amount OF deposits
in the national hanks during these same
forty years was e! esst GO The ag-
gregats losses of depositors during these
= forty years were $43,o2S.nO equal TO
only eoSr per cent. or about i-la of
per cent.
Reserve Against Failures.
Z Were the Treasury empowered to
deposit all its funds In the national
banks In Its discretion. but regulated
according 10 the capital and surplus OF
n the l0BtltutiDns sGiSSAfNi, anu Ut n Tatt
or interes, 10 he prescribed BY law. OF
say, two per cent. such accumulated
interest to Dc set aside for the pro-
lection and covering OF any possible
ioases AZ might occur through. insol-
s vent dcpos.tories, the possible Losses
woui1 be protected more than twenty.
four tinea over.
..Tns Government has an added Sc
curlty as n dcpossior By reason OF the
fact that through rs properly consti-
tutcd officers II has absolute super
ptsion ov~s any OF The banks that II
chooses to sslee; as depos!tories. can
enter the snrne at any time and nscer-
tain their condition.
How Inconsistent. therefore, must
appear the appeal TO the people Of our
8 Chief Executive, and OF our public mon
and bodies In general during the recent
hoardins az money, that they should
have confidence In their banks and
haya their nancy In their .cas,oiy,
erameHt. for iis depos,,s. was exaet-
Ling under. tho law. however literally
Interpreted, iho very cream, OF the se-
~