The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-06-21

OF us to contribute our Individual aid
enthusiastically small though he, In
combined effort to eliminate that
canse. or at least diminish its de-
structive effects in the future.
Defects in Currency system.
The panic nf 1907. commonly term
ed currency panic. nnquestfonably
should Impress us with the many de-
fects OF the American currency sys-
tenn. based. as II certainly appears ia
be. on unscientiflc, unwise and un-
sound principles.
Now, Mr.. President, time would not
permit my entering. into discussion
OF this subject. nor am slow TO ad-
NIT my inability TO do SO SUCCESSFULLY
but I do say that It does not require
a master mind to determine that we
have witnessed period of great in
flation, and we have observed credits
based upon credits. resulting in a
structure whose foundation was not
laid with the proper touchstone Of
our credit. which Is gold. our adopted
standard. of value. We should Ali al t.
vocate the necessity for the ma.nte-
nance of an adequate and propee re-
serve by every financial institution OF
this country.
A Practical Illustration.
"a practical demonstration OF the
fallacy of the practice OF carrying in
adequate reserves has come under our
observation recently. The Trust Com
psny of New York withdrew from the
ClearinR-House Association In 1903,
rather than meet the demand fer 10
per cent. cash reserve against their
demand deposits. Legislature enact
ment in 1905 become effective, required
that credit operations be restricted to
conform to a more adequate reserve
Out still inadequate In my cstima-
tom anu. therefor extending an ele-
ment OF weakness which should not
exist IL we are to make moro per-
manent the stability OF our financial
institutions.
The banks should be ever, mindful
OF the fact that 1t Is not the func.
tion of bank 10 borrow money /
am aware that the practice OF re-dis.
counting is essential under certain
conditions covering certain periods.
but the general practice should not
be cultivated.
One failure came under my obser-
walton because that bank had In times
of plenty continued to tax its credit
with its correspondents. and found it
self unable TO further realize on it's
We should cultivate perfect self-re-
lance and self-control. gerry essential
acquisitions when we are called upon
TO face great emergencies.
The bankers faculties must be per-
fce,ly clear when he makes his rapid
and detailed investigation into the
condition of his institution.
He must recognize that his deposit
tors. whose sense OF fear has been
aroused by the cry OF panic. makes
careful observation of his banker.
Whatever strain rests upon him there
must be no exterior indications.
Spirit of Cooperation.
Let the panic of 1907 also cultivate
q greater spirit of cooperation among
bankers that we may stand together.
remembering that in unity there is
strength. There was revealed dis
of the country to be governed by sell
fish motives during the fall of 1907.
Hoardtng of currency by a banker is
but poor demonstration OF broad
minded principal. The withdrawal of
all collection facilities between bankers
Is not wise measure for bringing
order out OF chaos and confusion.
THE banker who is not only contend
to rest in quiet satisfaction OF know
ing that his bank can weather the
storm. but who endeavors to make
capital out OF the less fortunate con.
dition of his fellow banker is wanting
In those Attributes OF heart, and mind
which should characterize each mem
Der of<our profession.
In conclusion. request that the
shock sustained by American Industries
because of the panic Of 1907 should be
a. constant source OF studv to oyerv
banker. Let him extend his knowledge
OF the American currency system, al
lowing It's defects to suggest adjust
ment. which will place that system on
a permanently safe basis-approach-
ing through It's evolution true cur
renoy expanding and contracting to
meet the legitimate demands of trade
protected against assault and repudia-
ton. and resting generally upon the
best and surest foundations