The Washington herald., 1910-01-02

done; there was no other way out OF
such abnormal and r0inous conditions.
Merchants, in alarm, Cancelled the or
ders they had given To jobbers. Whole
sale dealers withdrew the orders they
had previously sent to manufacturers,
and the manufacturers in turn reduced
the working hours of their establish
ments or closed them altogether Rail-
ways being deprived of freight. laid off
their men. One road in this city tenn
porarily suspended 10000 of its employees.
/ Industrial conditions. as / have said, were
sound, and a panics considering business
alone, was not justified. but the whole
country was in a state bordering on
frenzy Currency. and currency alone.
could have prevented all the loss and
trouble.
simply "a Money Panic.
Men have called it a money panic-it
was nothing else Bankers who had
money kept 1t to meet possible needs
that otherwise might be ruinous. 1t
/ should be remembered that our people
have $l5.00Q 900 on deposit in the 10000
banks scattACed over the country. The
money is safe, but 1t has been invested.
| Our stock currency of all kinds-gold,
silver, and paper-is about 5000. 900 900.
| Against 81 in actual money, therefore,
| there are s. on deposit
IF every man In the United States
were 10 call at his bank on any particular
| day and demand what is due him. all the
/ banks would have to close. all the mills.
mines, factories, and railroads would
! have TO cease operations. and temporarily
We should be a bankrupt people"
But how" | asked. "can the money
supply be regulated"
Il believe that we should have a grea;
central bank. with a capital of at least
| O0O0,o0O mostly In gold, and that II
should be owned by the national banks OF
| the country. I would have the bank do
| business with other banks and the ma
tional government and not with individ-
uals. There are such institutions in Eu-
rope and they balance the constant
changes In financial conditions and pre-
vent panics. The function of our own
central bank would be the regulation OF
our currency. II would be. therefore, a
| bank Of issue, taking the securities or
credits of any national bank. when called
on. and giving currency in exchange
| for immediate circulation. In that way
our stock of money would ebb and flow
/ In harmony with the natural tides OF
! business. Ii a national bank in Chicago
Or any other city needed 8, 100000 for It's
customers. Il could send its securities OF
I 4t4s.
currency. When It had a surplus OF
money it could return the $l.OO000O and
get its secl@ities or credits back
Plan of Central Bank.
What do you mean by credits?"
THE promissory notes Of a banks Gus
toners. or its commercial paper. As each
national bank would be responsible for
It's credits the central bank would take no
hazards
Moreover" Mr.. Roberts continued
''the government should deposit its rev.
enues with the central bank and check
against them when it paid its debts. as
is universally done by large corporations
in their daily transactions Of business
An immense amount OF the money now
received by the government is locked
up until needed, and consequently for the
time. IS Withdrawn from circulation. The
practice should be abolished"
But wouldn't Wall street ultimately
get the bank?" I asked
mo. There could be twenty-five direc-
tors chosen by the clearing houses in as
many financial centers, from Boston tc
San Francisco, and they would manage
and control the bank. One of our In
frmities as people IS that many Of us
are constitutionally suspicious We ara
forever seeing things that have no exist
ence. The world IS run on faith. one man
trusting another. That Is the theory OF
our own form OF government. Being com.
! petent 10 govern ourselves, I am sure we
are competent to run bank II the bank
/ should get dangerous. il would be quickly
pulled down.
People Can he Trusted.
Back of the bankers desire to make
money, of the purely material aspects Of
business. is the feeling OF personal re.
! sponsibility, together with respect fol
! the American flag and the love Of hii
/ country. Wealth, or the lack of It. /.
! no certain measure Of ones patriotism OF
/ individual integrity. l think the peo
/ pie of the United States. as a whole, car
/ be trusted. When we remember thai
| such men as Patrick Henry feared tn.
big States would control the little ones
we realize the errancy of human Judg
ment when it IS influenced by doubt OF
suspicion.
Men who see the narrow edge or
! which they sometimes poise in doing thu
nations business. who perceive the abys!
that opens at their feet and the chance:
for panic. ruin. and idleness in the mlds
Of prosperity. only desire to prevent tn,
/ dangers they are conscious OF at times
but are afraid to mention There would
/ be no profit in a central bank for any.
| body but it would, I feel sure. be a safe
/ guard to sanity and security, alike to the
! man who works with his money and Il
the man who tolls with his head OF
| hands"
| What advice concerning investments
would you give to the person who il
saving a part of his salary?"
! mo specific advice would be prudent
/ or possible. As a safe generalization Il
/ might be said that bonds Of large and
prosperous municipalities and Of rail-
roads that have regularly paid dividends
! for long periods of time are sound invest.
ments. But I am no long Substance coun.
selor and hope you viii strike out youl
/ question and omit my answer"
Copyright. 1910. by James B. Morrow
He Spoke Too Soon.
! From the Ladies Home Journal
| A well-knoWn business man attended