The Birmingham age-herald., 1908-01-28
FORGAN OPPOSES CURRENCY BILL Chicago Bank President Speaks
 In New York LESS EXPANSION OF CREDIT MT. Forgan Attacks All the Financial Measures, Including Bryan's Views,
 and Says Bankers Ought
 To Have Say.
LESS EXPANSION OF CREDIT

New York, January 27.-speaking of the nnancial bills offered as a panacea for present financial troubles, David R. Forgan, president of the National City bank of Chicago, in a toast to- night on the Chicago View" at the annual banquet of the bankers of the city of New York, comprising Group Eight of the New York Bankers asso- citation. at the Waldorf declared that. in his Judgment the country needs less. not more, expansion of credit. MT. For gen opposed strongly MT. Bryan S proposition of government guarantee or all deposits of the national banks" as a remedy of existing financial evils. Among those at the guest table were J. F. Morgan and Comptroller of the Currency Ridgely
 MT. Forgan's speech occasioned much applause. He spoke as follows:
 MT. Forgan spoke as follows:
 Coming from the second city of the country to the first, and appreciatfng the financial problems and burdens which fall upon the centers feel that my first word must be one of sincere reorganization. I congratulate you that the "stringency" is over, and that you are again in position to order a good dinner. l rejoice with you that the good ship Finance" has righted her. self and is now in fairly smooth wa ter, and that the other great vessels, Commerce" and Industry" are fol- lowing closely in her wake If you will allow me, I should also like to com mend the able seamanship displayed by you of New York during the late stress of weather. We in Chicago are rath CT proud of the way we weathered the storm I think we came through it better than most cities. But for cour- age to foce the situation, grit to stand punishment and unwillingness to strain yourselves in order to help oth- CTS, I take my hat off to the bankers Aof this city-western newspaper com parisons to the contrary, notwith- standing.
 Storms both teach and test seaman ship. For that reason American fnan- ciers ought to be the best in the world. banker may pass a life time in all most any other civilized country with out learning more than mere money loaning. But in this country his ex- perience soon develops him into a full ledged financier.
 Lessons To Be Learned.
 There must be something wrong with him if after a single decade he has not come to fully understand the na- ture of centralized or scattered re- serves, of temporary or protracted liquidation, of expanded or contracted credit, of clearing house certificates, of payroll checks, of rigid or elastic cur invent an original and infallible plan invetn an original and infalliable plan designed to cure all our financial ills, and that is one of the greatest ob- stacles in the way of reform, because legislators become mJstified by the wrangling among the bankers
 The late unpleasantness was so short and sharp that it's nature should be ap- parent to every banker. It was not due to defects in our country. We were having no more than the usual fall scarcity of currency when the storm broke. Extreme scarcity of currency was the result of the panic not it's cause. The cause was loss of public confidence which had been gath ering force for months, and which reached the crisis when your troubles here in New York came to the surface. The defect is our banking system brought fully to light by this panic relates to the reserves. The system which permits banks to count credit with their city correspondents as part of their reserves works all right in or dinary weath er or when the storm is
 
 confined to a particular locality. That locality may then draw upon it's city credit and find it is available as the reserves in it's own vault. But when the storm is big enough to scare the country it naturally happens in one of the centers, and general withdrawing of balances sets in from the country banks. This may easily assume pro- portions quite impossible for the cen ters to meet. At the time when the centers most need their reserves to help them through sonfe local trouble our system creates an additional anu greater difficulty in the sharp with drawals by their country correspond ents.
 Saved By Certificates. That is what happened lately. It has happened before, and New York has several times been driven to clearing house certificates as the only means of