The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-11-18
Credit, Currency and Business
ADDRESS OF GEORGE VI. REYNOLDS. PRESIDENT CONTINENTAL.
NATIoN,L BANK OF CHICAGO BEFORE THE TRANSMITS.
SISSIFII CONGRESS

>IS>IrTI
II "iaw # ;As agitation fer curr.ne.
legislation which has been going uI
during the pas, three Or four ysars
brought III. citizens OF this country II
i REALIZATION - the passing need 30,
,t:rr-aoy r"fora!. l assume thac rhs
business itLtilc. SeN.rail.. ~r..oEniza:
~" Weaknesses and the ieiCien les ri
"Ir present barking ard curr.uS: SHs'
'"n1. sni l shall rot. Therefore, MAKE
az extended reference :" il.
= rla-' respects IL has srea. mari,
hl.. - n" e'h.r hand. lis faults ar.
= ma-% ari - apparent that. like N:
'latn. L e only "a strong as its weak
c-:s@s wien cor:G.rce has been dis.
t9-o.d ard -h.re is z tendency on The
ra!- az tho puhl:c - hoard money.
Wh,ie ]: has given Us a uniform cir.
,,:le,;ns medium n The national ianh
TINTED States ho1G.secUr:d note. m.
= Ila, sch no-es have beer in.
si.si'c end iha--h" unah.a - respond
- ne -ea.ir:w.r;s of business has
made :. IMPOSSIBLE for the banks ~
iaa tnCrt-y t.rd-r certain conditions
- furnish currency in sufficient GUAM
i',t> = m==' taa demands - trade.
II" reserve requirements under our
-z'aTal banking s:s.s1i ara such
~. - e@ort NJ ths Tart ot ono hank
:" .r0rHas. is Owl ra>erve Of
= ssS!t% result II it> w!ihdra@inc
:-::s Standing - its credit with some
at1e7 ten:. li:raty reducing and
"~-:t@-3rs in. resarv. III ;:a, bank.
II: system is unscien:inc. AMI ;he
49, trat il has s.r'aii Us 81 we'll and
-: ~ ha". Eut hal more frequent
sa.'rs - SEASONS .: Severe depression
h.-:nsss IS due Wy ~larsel; 20 ;he
< T1-s IS" If credit in business
transactions IN this one Of
80 -.os: Ls.5 instruments Of which *
t7e bank Check.
Ihs Plan proposed is not a WIDE DE-
izrt!-e from Il present system.
Rather i auer.nts and widens the
s+steHl. correcting tho weaknesses in
III" plan and furnishing the machinery
for tile natural ebb and aow % bust
ness and a constant increasing and
fan % tha amount Of hank notes in
circulation.
The plan Q: the National Reserve
association is based On Iaes. .~sSant.a!
principles:
First, tina, i, Will be able 70 pro-
,ect u cred:. ny ex,=nd.os c.=5:: -
tn" non O. al rezso-aole require
ments.
Second. that through !. c-.5i..
could be exchanged t.on cas torr Ia
I" or for credic IF aaothe. err -.-s
making it possible ';.ooEa ins 5-o-
cess % business ior az. :o--:. q. c:-di,
notes. or the niga=st form ct c-=6i..
Third. that the cha-sc:e. q. -he
PAPER it would discoun. would very
largely prevent over-eypans.on Of
credit and confne the credit il would
extend To the natural channels o.
business.
Fourth. lis circulating notes vould
be elastic and respond fully TO the re-
q~uirernents Of business. and set 8. the
sam" vine the TAX which would De i'm
posn.l upon such notes when the re-
serv" Of the institution would fall t.e-
10" 20 per cent would be an additional
safeguard against oTer-e1pansion.
Fifth. il would assure less Hiolen,
~furtuations in interest rates and pro
vide credit 10 all banks at the same
rate Of interest.
sixth, II would either prevent panica
or minimize their effects.
In" ~adoptinn Of tho proposed plan
would enable n banker in a small com
muni,Y to ~exchang. his draft for -
per cent of the value Of q car of grain,
when accompanied by a bill-of-lading,
into either bank crdits, through the
uss Of which he could liquida,e his in
deteGness. or he could exchange that
oili-of-lading credit into bank notes or
currency, through the National Re-
ke!Te association. which bank notes
j. j. provided. shall be secured one
third by gold coin and two-thirds by
commercial credits Of the CHARACTER /
have described.
The iuctuation in the yield. as we'll
az the value. Of crops produced year
after year makes it necessary some
seasons to use an infinitely greater
amount OF credit in moving the crops
than IL required at other seaspns OF
the year. and / contend that our s-s-
tenn ~ currency and banking should
be such as would enable the local
through the use Of the notes Of solvent
people iii the community, backed by
the products Of tho soil. whatever
amount of credit would be necessary
to move the crops.
The proposed plan Of the National
association, having been con.
along scientific lines, would
make 1t possible, through the use Of
this institution in connection with a
bank in any community. to secure
whatever amount OF credit might be
''"""ooay " supp! tne Te~SSOnADIe ana
conservative needs of that community
where tho requirements for credit
would exist.
The plan proposed has been before
the people for many months and Il
vas put our in A tentative form for the
express purpose Of inviting a discus
sion. with a view on the part OF the
members Of the national monetary,
commission Of having this discussion
disclose whatever weak points IL any.
there were in Il.
AS q result Of this discussion many
notifications Of the original plan have
been provided for and will he covered
In the bill itself when It 8 prepared
Tor Introduction into congress, and.
indeed, o II not all OF the points
which havc been criticised in reason
nav" been taken into consideration in
IN" preparation of tho revised bin, and
am confident that it will. when in
trndnccd. meet with the approval OF
all business interests and the public
generally.
Nov. some people have An impress.
SION that this rs a bankers bill or Il
hill intended to be solely advantageous
to the banks Of the country. This is
not true. for the banks will not share
IN It's benefits in any greater measure
than WIZ n other line of business
"hlcn rs dependent upon the use Of
credit in its transactions.
All Business Benefited,
II the bill is adopted and 1t accom-
plishes what We hope for and cxpeCt
1t viii accomplish, all lines OF business
VIII be benefited. in that We will not
have frequently recurring uanfcs and
seasons of extreme depression when