The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-11-22
. 4.
WARBCRG'S ADDRESS

The address OF Paul NJ, Warhurr .,
Kuhn. Loeb and company Of Rev
York. follows:
wall street at present is a ruler on
a keg OF dynamite" Mr.. warburg said
ana like many an absolute ruler in
recent years it finds 1t more condu-
GIVE to safety and happiness to fore
60 some OF its preroEatives thrust up.
on New York. no by its own viii but
as a result Of u present laws and
conditlons. and to turn a Q oil
sarcny into a constitutional Demo.
cratic federation
The great weakness of American
as compared with European
oanktng he said. "lay in the danger.
ously large use Of stock exchange col.
lateral as the basis for bank loans in.
stead OF the use. as in Europe, OF com
mercial paper arising out Of the nor.
maj day-to-day movement Of goods
from PRODUCTS to consumers"
mobilization OF the promis-
sorry is the explanation OF Eu-
a1pes success where We fail" he de-
clareo. III a banking system such az
ours Is built upon promissory notes
Wnlch have no free market. the conse.
quences d needs be when deposits
are Withdrawn heavily or when there.
10 a strong commercial demand for
money. h a stock exchange loans
u be called and holding Of secure
tles must be sacrificed. these being the
only available liquid assets.
rms method is not only waseeful,
put vigorous. A modern system
must PROVIDE Tor means for banks to
rely upon their ability Of MARKETING
their bills receivable, which represent
the trade and commerce Of the whole
hation. In a modern system this can
pe done without appalling losses, there
nelhe no question of sacrifice OF cap.
ltal IN selling securities, but only a
questlon OF difference in rate Of inter-
est IN selling paper. Moreover, 1t can
ne Done without creating a panic:
since gradual liquidation of CONNER.
cial paper means a reduction Of the
volume Of all commerce. n trane
During the Morocco crisis a wal
scare developed in France and actual
boarding Of gold began; the with.
from the deposit banks we're
az a given moment alarming. But
tnere followed no panic. The Banoue
de rance issued notes freely. the
french banks collected their holdings
OF foreign paper and the general con.
noence In the Banque de Frances
power y cope with the situation over
came h fright without the horrors
that would have ensued with US.
We had no war scare in 1907. and
the country was full of gold. but
rates OF fifty per cent and 100 per
cent could not bring money because
our system-or rather lack of SYSTEM
had killed u own confidence in
our credit. We have no credit
system. but a discredft system.
Not infrequently one hears the re-
mark. II 1t be true that the National
Reserve association will democratize
our system and turn the banks cali
money into the bill market to a large
extent. taking 1t away from wall
street. why should the latter favor
the new law?'
The answer is plain: This over
low OF money. which in times of a
foods Nov York, and which. in times
OF need. is withdrawn with such We
hemenV that IT causes violent con-
WILSON'S is no blessing. but a source
OF danger to that city. While our
present system makes New York the
undoubted money center and gives to
Its banks a position Of prominence
and predominance. this power is pos
sessed only at the expense OF a re-
sponsibflfty which our present system
in times of stress brings smorti1ca-
ton The National Reserve %associa-
ton, II enacted into a law, will take
the monetary system Of the United
States out Of Wall street."