The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1910-03-31
FOR CENTRAL BANK
Speech of Hon. Frank l.. Fish at
Springfield, Mass, FavOrs idea.

Hon. Frank l.. Fish of Vergennes,
VT, former National Bank Examiner
whose jurisdiction during a part of
his time included Franklin and
Berkshire counties, in Massachus-
etts, spoke last evening on "A Cen
trad Bank" before the Springfield
Chapter, American Institute of Bank
ing, in this city, his address being
we'll received.
Mr.. Fish said in part {:
up to the fall of 1907 it occurred
to but few that we did not have the
best currency system in the world.
1t is true that before this time some
thoughtful students in banking had
declare that our system was unsc,-
entifc and would lead to calamity
and ruin, but most people thought
the prophesy was unwarranted, and
that with the gold standard firmly
established, no changes would be nee
essary in our monetary system dur
at thea f zbthgf bmescccv
ing the present generation. We were
at the high water mark in a period
of wonderful prosperity our facto,
les were working over time; our
farms had yielded an unprecedented
return TO the husbandman labor
was everywhere employed. Then
suddenly and without warming !
great failure in New York precipit-
ated a panic which brought destruc-
tion and ruin in SIS path, whose dis
astrous results can never be meas
ured and whose destructive infiu-
ences were felt throughout the
world. The shrinkage in values to-
gether with the losses incident to a
suspension of business amounted to
thousands of millions of dollars and
that the country escaped by the mar
rowest possible margin from total
| collapse of all credit and a whole
sale destruction of all values. The
banks suspended payment and adj,
mitted their inability to meet the =
obligations. Funds were no. at han !
to move the crops or to carry on the
ordinary operations of business.
Domestic exchanges were interrupt
cd financial ON, no rro e,,,op+ offoo+ad
every industry Laborers were
thrown out of employment and wag-
es reduced. Bank after bank closed
its doors and the panic became not
only nationwide but worldwide in
! it's consequences, and had it not
been for the Joining of forces by the
great money powers of the nation
and placing a great man in charge
of the situation, who had the power
and the foresight to stay the con-
fagration that was sweeping on 20
ruin, no one can predict what conse-
quences would have followed. While
| this panic was but one of a series
its effect was to open the eyes of
! thinking men of the inadequacy o.
our currency system.
The grea. business of the coun-
try is done in credits-95 to 81 per
sent as it is estimated aside
from its use as bank reserves, money
is simply the change of the business
world. 1t is used for pay rolls, for
retail trade, for use among farmers
and is a handy medium of exchange
by travellers in passing from one sec
ton of the country to another. The
large transactions are all made Ivy
credits. A bank pays in a given am
cunt of capital, establishes a credi'
of its own and becomes a dealer in
credits All commerce in the last
analysis us simply barter Every
community really pays for the pro
ducts it buys from the rest of the
world with the commodities of IT.
own production.
DO you, as bankers, know Of any
good reason why the great govern
ment of the United States should not
do its banking business as States
counties, towns, Corporations, indi-
viduals and all the other nations OF
the world do theirs? Are we Sc
unique and old-fashioned that We
musL use the machinery that Andrew
Jackson set up for us three quar-
ters of a century ago while all the
other nations of the world have thC
facilities which have been fashioned
for them by the wisdom and eXper'
fence of modern times? The answe.
is too obvious.
"The essential difference between
banking in the old world and new il
in the effectiveness of the reserves
In the old world these are held as il
great central reservoir ready to b'
drawn upon in short notice to pu
out a fire before it becomes a con
= Migration. Here they are scattered
broadcast throughout the bankin.
system and as soon as panic il
imminent they are clung to by the in
dieidual banks for their protection
at must be admitted, | think, tina
$ the central bank systems are far bet