The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1911-11-22
And at inns inns Safeguard
aim Credit Over
nSioIs B

c!!atioh 1lih beeor1ss law IL viii
provide 81 inst tution which win be
able to exte1 credit IN proportion
to3all the. 1easouabEe needs OF busi-
Z nesB IN this conn and at the same
time safesaard against the over-ex-
pansion Of err 4, !" declared George
II. Reynolds president Of the Com
tfnenta1 ana 9sonmercial SatfonHl
Bank 81 Chicago. at the annual
eonventiomof tie Aemerican Bankers
Association today. While the pro-
posed plan Is not wide departure
from the present system, he said, 1t
would correct the present plans
weakness and Furnish the machinery
for the natural ebb and flow OF busi-
ness; while 1t broxddes for central-
izfng the resources of the country.
1t did not provide for centralizing
the power, re continued:
''In view OF the agitation for cur
rency legislation which has been
going on during the last three or
four years. or since the pane Of
d 9O7, which brought the citizens of
this country to a realization of the
pressing need for currency reform,
I assume hat the business public.
generally, recognizes the weakness
and the defeiene:es of our present
banking and currency system. and
shall NOT. therefore. make any ex-
tended reference to it.
THE system IS unscientife. and
the fact that ii has served US as well
as It has, and that we have not had
more frequent panfcs or seasons OF
severe depression in business, is due
very largely to. the growing use Of
credit in business transactions in
this country
.af we safeguard our business
against recurring panics and sea-
sons Of of extreme depression, we
must have a system OF currency and
banking for the protection Of credit
by means Of which our liquid cred
its can be used and exchanged,
thus making ait possible, when
NEEDED. for bank to convert its
liquid assets, which consist in great
part of notes Of Solvent firms, into
the forms of credit, even to the ex-
tent of being able to convert the
same into currency or bank notes
when necessary.
This is absolutely impossible
under our present system because OF
the inelasttclty OF our bond-secured
national bank notes.
Thus you will see that IL a bank
can not convert it's liquid assets into
bank credits or bank notes in times
of need that must. If called upon to
do so, pay lawful money against
such credits, thereby imparing it's :.
reserve.
This condition. naturally, re-
stricts the amount OF credit bank
can extend, no matter how impera-
tive the need for credit may be.
.rIt is to correct these inef-
hciencies in our present banking
and currency system. and to protect
credit in this country through
making the credit backed by the
solvent debtor exchangeable for
such forms Of credit as the holder
or owner OF the credit may demand.
that we ned currency legislation.
The inauguration of a system OF cur
rency and banking such as will give
to. business these facilities is the
basis of the plan proposed for the
of the National Reserve
Association of the United States
While it provides for central
izing the reserves of the county it
does not provide for centralizing the
power; the assembling of such large
reserves will create an increased
ability to extend credit. for that
power will be decentralized and be
turned back to all OF the banks in
stead of remaining in the hands. of
bankers in the Central Reserve
cities as is now the case.
ITO secure credit now the public
must depend upon the ability and
the inclination Of bankers in those
cities to furnish it. but II the Re
serve Association Is formed the
country banker, as well as the city
banker. viii be given the right by
law, as he will by he very nature OF
the plan, an assurance that he can
secure, through rediscounting paper
With the Reserve Association, the
credit necessary for the protection
Of the industries of his community
when they are conservattvely man
aged: therefore, the plan. while
providing for the GENERALIZATION of
- .-.-..,,,,., rro,,{,Ios for a denaU-