The Washington herald., 1910-03-20

hind them is certain prosperity-high
prices for everything the land produces.
new knowledge OF agriculture, and ma
chinery that has reduced or abolished
the hardest and dreariest kinds of hand
labor Before them, In the great ma
jorlty of cases. are small wages, a living
from hand to mouth, in quarters hardly
so comfortable as rural attics. and a
long string of scent theaters.
But you came down from Delhi" I
said. noting a tremendous exception.
Again" Mr.. Cannon went on to say,
not needing my interruption. I'VE are
faee to face with a perplexing racial
question. Negroes fill the South There
are 10000 Jews and myriads OF Italians
in New York Moreover, a numberless
multitude is coming to the United States
every year from Southern Europe. Can
we make all of the strangers among Us
and on the way into Americans Of the old
and tried sort, into such Americans as
are the Germans. English. Scotch Irish,
ard Dutch? I fear" Mr.. Cannon said in
the tone of excuse. that 1 have been
talking of national problems rather than
national faults.
''You must have had an arduous time
as chairman of the loan committee of the
New York clearing house, during the
panic of 1907" I said.
Nearly every business man had, I sup
pose" Mr.. Cannon replied. The causes
Of the panic were cumulative-in all such
financial tempests there is a gradual
gathering OF the storm until It breaks
overhead. a panic is developed by spec
ulation in good stocks. then in stocks not
so good, and finally in mining shares
and real estate. A huge bubble is blown
and some one accidentally sticks a pin
in it. The failure OF Heinze was the
direct cause of the disturbance of 1907.
He happened to break the bubble. When
panic occurs. bankers shut their pocket
books, whereas that is the time to open
them and relieve the pressure. Our rigid
currency system only helps 20 make con-
ditions worse
How would you change it?'
Would Have Flexible Currency.
Various plans have been suggested
and have one among the rest I would
give our currency fexibility through the
clearing houses OF cities where there are
subtreasuries OF the United States. A
clearing house you understand, IS an
organization OF local banks During the
panic OF 1907, the clearing house in this
city issued certificates which passed as
currency. thus giving a concrete demon
stration of their values. I would permit
a bank 10 take t., credits. otherwise its
commercial paper not yet due, 70 the
clearinghouse aud get a certificate which
on presentation to the subtreasury would
| be taken for a fixed amount OF emer-
/ gency currency. Under our practice in
| 1897 a bank with 81 0e0. 600 Of good paper
would have received clearing house Ger.
/ tificate for $75e 600. That individual bank
with its capital. surplus, and assets
would have been behind the certificate
Furthermore, all the banks that were
members OF the clearing house would
also have been behind the certificate
/ by the act OF issuing the certificate they
would have guaranteed its payment II
would have been scaled, you see. 25 per
cent below the actual value OF the de-
posted securities.
Now, I would extend that process OF
relief by authorizing an exchange of thu
| clearinghouse certificate-with further
reduction of . per eent-at the subtreas-
ury for emergency currency kept on hand
/ for that particular purpose. Thus a
bank In time OF stress, having $1,000, 00
of sound credits would be enabled to OBJ
tain 10000 Of ready money for the ac.
commodation Of its customers, The bank
getting the money, the remaining banks
in the clearing house and the S1.000.O0
of commercial paper would amply pro-
tect the issue Of curreney-indeed, moth
ing on earth could give II a greater de.
gree OF solidity and security.
Would Check PanicS.
"a panic is a shock Money dghtens
AS a matter of fact. 1t is locked up and
put beyond the reach Of business. After
panic there Is always a plethora OF
money. Accordingly. under the scheme
| favor, the bank having received emer.
gency currency could return it and receive
its pledged commercial paper. The trans.
4 dGliOA Att<A WbNAA br NAV-Cu- uCAOkt
such a plan as I have outlined could be
quickly and easily operated, and that Il
would be absolutely safe and entirely
adequate"
You are applying" I said, ''the same
methods of organization, as chairman OF
the religious work department of tht
International Young Mems Christian AS.
sociation. that you would employ in q
business establishment"
Yes; We are preparing a great cam.
paign to stimulate religious work for mer
and boys In ninety cities Of Canada
Mexico. and the United States. We have
staff Of young, keen, and devoted
specialists and promoters. each OF whom
would be rich man were he engaged
in business. They have learned how Il
approach men. Hereafter. all of ou
knowledge is to be passed over to tho
| churches. We are going 10 help the min.
listers build up their congregations.
Last year a new association building
was opened IN North America every si1
days. Our property is worth sec, SOC, COO
We are In Alaska, Panama, the Philip.
pines, and Hawaii, and on the battle
ships and at the army posts of the ma.
ton. We are teaching foreigners The
English language and useful occupa-
tons to $4,000 young men. Twelve trade
schools are supported out OF our funds
| 2lO00 educational clubs have beer
formed. and 6,00O Of our members are
electrical apprentices. We are training
chauffeurs. and have started classes fol
flying machine operators. Nearly 1000, 0Ot
men attended our noon shop meetings
last year, and our converts, all told
numbered 10000