New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-05-25

central reserve association, ne saw
bring them all into a workable organic
ton. II would only be question %
ganization, and not at all one or oe"'i NJ
ton That the proposed system would DC
central bank Secretary MaoNeash oe
MED. He went on:
There are a few main things necessafy, ~ ~
a right banking and currency systes,n, 80. q
Of these is circulation al"13s ,hat
and never superfuous We al hno" ,'" 81
And this currency circulation must re "a
certain ara so automatic that the puphc
mind shall res: in the perfsct assui ar
that il is always Efficient anu never '"i
fluous. 49, -
Then the next great matter IL the re-
serves Everybody knows that a oanhlils
system must have avaiaole reseirs -
serves that can be counted upon Lo' ,,re !,
and nor merely for ornament our banhine
system has taken INFINITE pains 10 proNlue
reserves We have established them ny
law We have exactly dehned every u e',.as
of reserves But We do not have rese, go e..
The reserves which we have arranged 10Y
in our system. and which we take sucn
care 10 provide always elude us II is not
even too much 10 say that our elaooIa az
and detailed provisions 70 secure reseI.
have in effect prevented them IN an emei
gency We have only what we call re
serves. In point Of fact, what we nav
provided as reserves are simply nkeu
amount OF money in banks-held in inhnlte
enough fixed. scattered. independent am
selfish 70 insure their greatest inaouVl,y
and boarding whenever trouble threatSns,
And in consequence at the moment Wiz
the business world is most in need OF bahh
ing facilities, our system limits those ldOhi-
ties and practically ties them up 20
What is needed is such reservoir OIL
available reserve. available to any respon-
sible and well handled bank. as will pro
vide at all times reasonable banking facln-
ties. The necessity is that we shan nave
such trustworthy reserves as VIII put tne
public mind al rest as TO any possibllty OF
a financial famine--of a banking FAMINE
The business mind and whole public nina
the mind Of all the borrowing world ana
Of all the depositing world. must resi- ao.o-
lutelv secure. and absolutely beyond agita-
ton. in the faith that no circumstances can
rise when there will be a banking famine
II is not simply the existence of reservoir
Of reserves that is needed but there must
he public faith in that reservoir
The Prevention Of Panics.
These two provisions will mean the pre-
vention Of panios A city with an mex
about a water famine II dismisses the
chance Of that misfortune wholly from its
hahitual thought The public mind never
0wells upon IL. You have never heard OF
city having a panic about water famine,
II. as In Chicago, II draws its water from
n great lake That is one Of the chances
Of life that do not exist for the people OF
ccuntry's finances are buttressed with an
automatic currency supply and an auto
matte supply Of reserves. a panic does not
occur for panic Is condition Of mind
induced by belief in the probabilities OF
disaster
At present however. we never know how
long fair financial weather viii last We
are always watching the horizon for gath
eTing clouds.
There is no proposal in the plans Of the
Monetary Ccmris SIGN. and no proposal Is
necessary or would be fitting. 70 radically
change the national banking system What
ever is proposed or needs 70 he proposed
is merely something 10 he added 10 that
system 10 complete II ard 20 carry ont
and secure its own purposes
There f. no revolution in the plan. II rs
only evolution. The volume Of the present
national hank currency depends upon VIVA
each individual banker may consider MS
the seat Of the trouble OF the cur ency situa-
ton. We must change the control OF the
volume Of the currency from the ,nou11
sands Of atcmized banks 70 central
agency that takes the public view and rep
resents the hanks as a whole We must
substitute for private interest the pupnc IT
tcrest We must remove the depenuehce o.
the total volume Of the currency rom the
decisions of over seven thousand boards OF
directors who do not pretend 10 consioer
anything but the immediate pront on tnep
own individuelized hanks and place me
control Of the volume Of the currencY
where IL will have adequate conslderation
and adAouato administration. And the plan
n accomplish this as il will finally be pro
POSED by the Monetary ,omnhssi'" VIII
both conservative and simple.
Capitalization the Only Alternative
Don't fail 10 read the signs OF the times
Don't fail 10 understand that TINS propose
tion OF a central organization of your own
is an alternative. and the only alternative
to Capitalization in few hands 81 lne
financial power of this nation And th.s
Capitalization. which is the a!terhaI.ve Oh
your INSTRUMENTATION, is not the mere -
suit Of design. II could not be the mere re
sui Of design II is and win he the result
Of forces that are Let loose ~ tne SIS
tenn There must be some form or control
And the question is shall the control rest
i'm the hands If all the bankers or shaL IL
rest in the hands OF few bankers!
There is one other thing that must be
rrovided and will be provided under the
Monetary Commission plan. We mus nave
a national machinery 'hat VII suln sun, ,i1
the rate OF interest between banks. What
we want 10 do now that the matter Is 50
well in hand is not esy ~ PeeserrS t 20 70
eradicate once for all all that is ha1. And
while we are doing all this We must rot
he content with combating our hon- s!s-
ion, we do not any lonsSc i've IN oniy
home country We live N nation 'nat
is roth a home country and a world o2un-
trv Two things We must equip ourselves
uifh-a merchant MAI Iit anu va nm.
eveter that IAN 20 out INTO all he world
as a part Of eur Commercial system,
AS 10 approximations that the central
Reserve Association may become a poll
ticai institution or fall into the hands ~
a fer. noreved men let me saw theN are
wholly unnecessary. II can never become
= rolitical agency. u is easily removed
for all time from any remote rossihlntN
of becoming controlled hv any few men or
ary few hanks Tt can never ne o"ned
hv less than all the banks who create u.
Banks should he chartered he said. so
that any OF them could carry on any
letitinnate branch Of finance. II was
futile and unnecessary. he said. that one
hank should he 4 savings bank another
commercial bank and another trust
company. He irdorsed a broad plan OF
banking which would permit an expansion
10 meet all needs Of business.
Il hope banking and currency reform
will escape the misfortune Of becoming
party question" said Secretary MacNeagn
in conclusion. The outlook for escape Is
excellent. There is no evidence in si6ht
.bot tho rarties will divide upon it..