Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1911-11-22
us. BANKING SYS|[M
WORST N WORLD
cHuRct4MAN, CORNELL PREsI.
DENT, sAYs Losses CAN NOT
De EXAGGERATED.
PAhlcs HEAVY BURDEN ON
INDUSTRY AND A DISGRACE
eslisvss National Association Reserve
Association Directors Could Not Be.
essas STOOLS Or Agents Of Daring
Rivals Of Wall Street Manipulaters"
-sankire System Antiauassd.

Lne WORST system VI DdAhiS dAu WI
rency in the whole civilized world. It
is impossible to estimate and difficult
to exaEgerate the magnitude of the
losses which this country has suffered
from the defects of its present bank
! ing and currency system. No other
civilized country would so long have
endured such a waste Of Its resources;
no other country is rich enough to
| have stood II"
Jacob Gould Schurman, president of
| Cornell University, thus assailed the
American banking system IN the prl:i-
cipal address before the American
Bankers Convention today. He placed
banking reform above trust regulation
and tariff revision in importance for
the good of the country.
I'm comparison with sound banking
and currency system proposed changes
| in our tariff and trust laws, important
and urgent as they may be in them
selves, fall into the background. lie
said. You will not misunderstood me.
recognize the propriety OF bringing
our tariff laws into closer harmony
with the conditions of modern indus
II try and commerce and the demands
both of the consuming and the pro-
Educing public. And tho / am firmly
convinced that business on large
scale Is absolutely essential to ell
cheney in the modern world and should
be protected and encouraged by all
proper and legitimate means, hold not
less emphatically that the public have
right to be protected from oppres-
sive monopolies.
But whatever the losses. inconven-
fences and sufferings which may be
attributed to our tariff and trust laws.
they are far less than the losses, in
conveniences and sufferings winch are
due to the inperfections OF our bank-
ing and currency system. To the SUI
preme Importance of this issue, there
fore. it is indispensable that the pub
| lie should be aroused
| Banking System Anticipated.
| President Schurman said that bank
| ing and currency, the invaluable and
indispensable agencies Of all business
were a half century behind American
business. He said:
Look at the magnitude of the inter-
ests which are involved in the ques-
tion of banking and currency reform.
The business of this country last year
100000. Four-fif of that business
was done by means Of bank checks.
and of the remaining fifth consider
| able proportion by means of bank
notes. A plan of banking reform, there
fore, aims at the perfection OF ma
Chine which engages in the work Of ex-
change to the extent of over 1915, O0e.
600, 900 annually.
1 .rr!.o I,,SipoSS of fI,e country n nm
Gergonc consolidation, coordination
and Capitalization at tremendous
rate. But our banking system Is para
lyzed by decentralization and lack Of
co ordination. To realize how anti
quated that system is one has only to
imagine trade and commerce conducted
today as it was fifty or 100 years ago.
Yet that is the dccnntralized condition
in which under the present system our
banks are actually left
| Panics, he said, We're a national dis
grace. They could be stopped. and
they ought to be stopped.
when panics come and wage-earn-
! ers are thrown out of employment, and
| farmers with good properties can not
borrow money at moderate rate Of
! interest, and no one can get the cash
necessary for the transaction of rout-
| inc business and checks are not ac-
copied at face value. the public must
be made to understand that these evils
in which all alike are participating are
due to cumbersome, antiQuated ana
unscientiflc system Of banking and
currency and that they could be elimf-
mated with the reform of that system.
| Insurance Against Panics.
President Schurman said that The
lack Of cooperation in American bank
ing brought on panics.
I'm the panic Of 100! there was
abundance Of reserve money; but 1t
was divided, scattered, segregated and
subjected to local control. That cir
cumstance explains why panics occur
In the United States with far greater
frequency than In other civilized coua-
tries In France. in Germany, in Eng
land, there are great central national
banks. and they have all the facilities
needed for warding off threatened
panics. They can establish a new rate
Of discount; they can conduct extern
sive operations In foreign exchange
and gold bullion: they can discount
and rediscount commercial paper, and
otherwise inspire the confidence OF the
community. 1t may not be possible or
desirable to charter in the United
States an Institution like the Bank Of
France or the Bank of England. But
unless some way Is found Of co-ordi-
mating the scattered strength of the
$4,000 Independent banking establish
ments which now hold the money re-
serves Of our country, business will
continue in the future as 1t has in the
past to be subject to extreme fluctua-
tions and to suffer from the panics oy
which 1t has hitherto been character
ized."
He was free to admit that. "the pub
lie was sensitive and suspicious In the
extreme" - to the danger Of Wall
street getting control Of the National
Reserve Association. but he believed
that the proposed plan would keep the
people In control Of the credit machin-
cry. He said: ~.
Danger Of Wall Street Control
The plan seems 70 reduce to the
, lowest possible degrees the opportunity
OF exploitation by Wall street. So far
as appears. It might be said that the
possibility 10 wholly eliminated. But
u vSsv e lha subtle maahinA4iona