The Waxahachie daily light. [volume] (Waxahachie, Tex.) 1894-current, 1911-10-31
BANKING REFORM TO
CHECK WALL STREET
MINT DIRECTOR SAYS RESERVE
ASSOCIATION MUST NOT
PROMOTE SPECULATION
Comments National Citizens Lea
que Work TO stop Money Pan
ics-0nly Basis for
Loans.
Associated Press Special

Washington, Oct 5l.-DeoFke Il
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 In
terest of speculation. He disagrees
with James ]. Hill that the NationaI
Reserve Association, the proposed
plan of reform, should accept stock
exchange collateral as security Tor
loans. and says the association
should only loan on commercial pa
per arising out of day-to-day trade
transactions.
Il 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 It's first Inn
petus from the panic Of 1907. Every
| bodv knew while that panic was on
that something was wrong with our
banking system. There are Two
| 1ings 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 leg
ltfmate. current needs OF their GUS
toners at some reasonable rate. III
view of our experience in the past
two conditions may seem to make
very large contract, but In every
other important country Of the
world those conditions are met,
There Is plenty of proof that a prop
erly organized banking system can
meet them
There is an end TO bank runs
whenever 1t is known that the indi-
vidual banks will be adequately sup
ported, and the amount of credit re
quired to handle the current ex-
change can always be supplied. Oh
course. no banking system can un-
dertake to furnish all the credit that
may be wanted for speculation or ex-
! travagant construction, but 1t can
| and should furnish all that is need
ed to move the crops and make the
current exchanges of trade.
"Our system broke down in 1907
when great railway systems eoult
not get money for their pay rolls
the movement OF such staples as cot
ton and wheat came to a standstil
and hundreds of thousands OF wage
earners were thrown out of employ
| ment.
Every consideration demands
that the country be safeguarded
against a repetition of this expert
ence. 1t is. more than a banker s
problem or merchants problem; 1t
Involves stable markets for the far
mer and steady employment for the
wage-earner. 1t is more important to
wage earners than any other single
question, more important to farmers
than year crop, more important
to all classes than any disposition
| of the tariff or trust questions can
| possibly be. 1t is now up for action
| and ought to have right-of-way over
| every other issue until 1t Is settled
| by comprehensive and final treat
ment.
There is no wide disagreement
among the friends of banking re
form. 1t is agreed that our system
lacks unity and cohesion and resery'
powers. There is general confidence
that our banks are solvent, but NJ
confidence in a crisis that they vii
be able to maintain cash payment
, or grant needed accommodations
The banks feel their own helpless
ness, and their struggle to keep u
I their cash reserves and reduce thei
. loans do even more to demoraliz
the situation than the actions of tn
public
What is wanted is some respor
D sible organization, with reserv
sources which command complet
confidence, that will stand back {
u the individual banks and supper
! them when help Is needed by takin
q over some of their assets and az
i vaneing cash thereon. Experienc
e elsewhere has demonstrated that tn
demands upon such an institutio
can be effectually controlled b
raising the discount rate. That is I'll
general principle to which the RET
of the world has come, and 1t is no
commonly accepted in this countr
The only disagreements seem to
: over the details of this Organization
Il see no reason to fear that sue
}, an organization will be controile
: In the interest of locality or cl
g que. The controlling board will
r chosen from all sections of the coul
2 try, with proper checks and SAT
n guards, but the most importai
d safeguard is regulation as to II
o character of paper that shall
|. htndled.
: Il see that Mr. Hill argues this
I. good bonds should be accepted 6
J. collateral No doubt the bonds {
good railway and Industrial corpo
!, atoms are safe security for loan
s but there is practically no limit
: the-supply, and the only real DANCE
+, that exists, that the organlzatio
: might be used for stock operation
: or promotion schemes, turks in tn
. use o! this class of collateral,
9 Warehouse receipts for whei
and cotton are totally different. TIL
s supply of these commodities is Sc
| 4