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

ought to be reserve power somewhere
to deal with this annual situation, and
any situation that may arise. There
| should be a reserve supply of credit
and currency available under sliding
scale of interest rates, which would re-
press expansion and bring about a
contraction of credits and of Totes
within a reasonable time. 1t goes
without saying that to maintain elias
ITCHY in any volume of currency you
must provide for contraction as well as
expansion. There must be contraction
af. er every period of expansion in or
der to regain the power to expand.
How is the supplemental supply of
credit and of money to be obtained?
Ny own opinion is indicated by the I'll
tie given to this talk, a Central Bank
of Issue l know thai the suggestion
of great central institution arouses
suspicion and antagonism from the
outset l believe Line persons out of 10
who have been students of the subject,
will say tina. an ideal solution of this
problem is to be found in some central
authority which may issue notes In
time of stringency, on the security of
short time commercial collateral, the
payment of which will provide for
their retirement; but they say the fear
of an abuse of the power is so great
how he r,1n
be realized. OF course anybody can
imagine possible abuses. We can all
think of some power for mischief
which a central bank ought not to
have.
IF, however, the ideal solution
would be in central authority, l be-
lieve We ought to adhere to that gen.
eral plan and endeavor to secure the
possible abuses. If we have a problem
here to solve We ought to approach
it in progressive spirit, and be open
minded and candid in considering
every proposal. In the first place.
would it be wise to vest such authority
entirely in bureau or official of the
government? 1 think you will agree
with me that it would be undesirable
to have a government official making
loans We won't argue that point But
if this central authority is not to be
vested entirely in the government off,
Gals, shall it be vested entirely in
corporation organized for private profit
like the old United States bank which
Andrew Jackson made war upon? This,
1 think, is the model most people have
In nina whenever a central bank is
proposed, and it is against such an or
ganization that antagOnism exists. For
my own part l 90 not believe such an
institution could be established or
ought to be established. l don't favor
the creation Of any great over-snadow-
ing institution with branches scattered
over the country to gather up deposits
and enter into competition with the
local banks. We have devolved a sys-
TEN of small Independent banking in
situations, owned at home, differed a.
home. and doing business at home 1t
is free and flexible system, which en-
ables every community to supply it's
own banking facilities and interests
every banker in his local community. 1
am not in favor of any plan that will
antagonize or injure the Independent
local bank. On the contrary, I am
looking for a plan that will strength
en- the local bank, that will help it
meet The needs of it's locality, and pro-
vide a resource for it in time of danger.
IF we are looking for a Central au-
thority, and do not want to give these
powers wholly to bureau of the gov
eminent. or entirely to a corporation.
there is only one other alternative, and
that is the plan to which the people OF
all progressive countries are turning
for solution of many problems which
arise in our complex modern society
combination Of private ownership
and management with public control
Now TO some people that sounds
very indefinite and formidable. But 1
want to call your attention to the fact
that this combination has been already
quite completely worked out in the
banking business, and is ir. successful
operation in every other important
country of the world