Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1911-10-31
A CHECK TO
WALL STREET
Hon. Geo. E. Roberts Pleads for
Banking Reform to Pre-
vent Panics in the
Future.
BUSINESS PAPER LOAN BASIS
Must Not Promote Stock specula-
tion-Commends National
Citizens League.
BUSINESS PAPER LOAN BASIS

Washington, D. c., Oct. 3d.
Especial to the Freeman-Tribuue:
Hon. Geo. e. Roberts. Director Of
the Mint, says that the country's
| banking system must be reformed IN
the interest of general business and
not in the interest OF speculation.
He disagrees with James J. Hill that
the National Reserve Association,
the proposed plan Of reform, should
accept Stock Exchange collateral as
security for loans, and says the AS
ISOLATION should only loan on COM
mercial paper arising out Of day-to-
day trade transactions.
81 think the organization OF the
National Citizens League is one OF
the most promising signs OF the
times looking to banking and cur
rency reform" says Mr.. Roberts.
"This movement got its first I'M
petus from the panic Of 1907. Ev-
erybody knew while that panic was
on that something was wrong with
our banking system. There are
two things that are fundamental In
banking; the banks should be al
ways ready to meet their cash obi
cations on demand and they should
be always ready to loan for the iegt-
innate, current needs OF their Gus
toners at some reasonable rates In.
view Of our experience in the past
those two conditions may seem to
make very large contract, but In
every other important country OF
the world those conditions are 41net.
There is plenty Of proof that
properly organized banking system
can meet them.
There is an end to bank runs
whenever it is known that therin-
dividual banks will be adequately
supported, and the amount OF credit
required to handle the, currentf ex-
changes can always be supplieda OF
course, no banking system can un-
dertake to furnish all the credit
1 that may be wanted for speculation
or extravaganza construction, but It
\ can and should furnish all that IS
needed to move the crops and make
| the current exchanges Of trader
/. "Our system broke down in 1907,
when great railway systems could
not get money for their pay rolls;
the movement Of such staples as cot
ton and wheat came to standstill
and hundreds Of thousands Of wage
earners were thrown out Of employ
ment.
i Every consideration demands
that the country be safeguarded
against a repetition Of this experi-
ence. 1t is more than bankers
problem or merchants problem; IT
involves stable markets for the
| farmer and steady employment for
the wage-earner. It Is more I'M
portant to wage-earners than any
other single question, more import
| ant to farmers than years crop.
more important to all classes than
any disposition OF the tariff or trust
Questions can possibly be. 1t is now
lup for action and ought to have
right-of-way over every other issue
until 1t is settled by comprehen-
sive and final treatment.
"There is no wide disagreement
among the friends Of banking re-
form. It Is agreed that our system
lacks unity and cohesion and reserve
lpowers. There is general conf
dence that our banks are solvent,
but no confidence in a crisis that
they will be able to maintain cash
payments or grant needed accommo-
dations. The banks feel their own
helplessness, and their struggle to
keep UP their cash reserves and re-
duce their loans do even more to
demoralize the situation than the
actions of the public.
what is wanted Is some respon-
sible organization, with reserve re-
sources which command complete
confidence. that will stand back Of
the individual banks and support
them when help is needed by taking
over some of their assets and ad-
vancing cash thereon. Experience
elsewhere has demonstrated that the
demands upon such an institution
can be effectually controlled by-eais-
ing the discount rate. That is the
general principle to which the rest
tof the world has come, and 1t Is now
commonly accepted In this country.
The only disagreements seem to be
lover the details Of this organization.
--~''I see no reason to fear that such