Albuquerque evening herald. [volume] (Albuquerque, New Mexico) 1911-1914, 1911-11-21

upon money rates largely favorable |
to interior institutions.
st is plain TO be seen. without fur
Their discussion, that the provisions Of
the association az 10 taxes. earnings,
dividends ana the probable eject OF
the proposed organization upon inters
est rates In this country are not only
81 the utmost importance, but that
they have been given due consIdera-
ton by those who prepared the plan
and that they are aimed 10 encouraged
ana conserve the business Interests OF
the people ~ the United stntes."
WALL sTnEtr ~
KEG or DYNAMITE
fikcnlnR Wall street TO ruler ait-
ting upon q keg OF dynamite. Paul NJ.
Warburg. OF Kuhn. Loeb a Co., in an
address before the American Bankers
association declared today that the
National Reserve association would
take the monetary systcm OF the coun-
try from the control OF Wall street In
forests and give the United states an
elastic system such az never enjoyed
before
wall street. at present Is n ruler
on n keg OF dynamite" MIR. warburg
said. 'and like many an absolute
ruler In recent years II Bndn q more
conducive 20 safety and happiness 70
foreso some Of Its preRogatlves thrust
| upon New York not by Its own win
but as result OF our present laws
and conditions. and to turn money
oligarchy into constitutional demo.
cratic federation"
The great weakness OF American
banking. IN compared with European
banking" he said. ''iay In the danger
ously large use OF stock exchange col-
lateral as the basis for bank loans In
stead OF the use, AZ In Europe. of COM
morcial paper arising out OF the nor
/ NAL day-to-day movement OF goods
from producers 10 consumers"
THE mobilization OF the promis-
sorry note Is the explanation OF
! Europe'a success where We fail" he
I declared. III banking system such
az ours u built up on promissory notes
which have no free market. the con-
sequences must needs be when de-
posts are withdrawn heavily or when
there IL a strong commercial demand
for money, that stock exchange loans
must be called and holding OF secur-
tiles must ba sacrificed. these being
the only available liquid assets.
'"rhis method Il not only wastofui.
but, as the past has shown M. II ~
most dangerous. A modern system
must provide for means Tor BANKS to
rely upon their ability of marketing
their bills receivable which represent
the trade and commerce OF tile whola
Il n
be done without appalling losses.
there btlng no question Of sacrifice OF
capital IN selling securities. but only
a question Of difference In rate Of In
terest in selling paper. Moreover Il
can be done Without creating panic;
since gradual liquidation OF CONNER
clai paper means a reduction Of the
volume OF all commerce and trade.
During the Morocco crisis war
scare developed In France and actual
boarding Of gold begun, the With
drawals from the deposit banks were
at given moment alarming, hut
There followed no panic. The Banaue
de France Issued notes freely. tho
French ban&s collected their holdings
OF foreign paper and the general Oon-
iidence IN the Banque dc Frances
power 20 cope with the situation
Ioycrcame the fright without The hor.
rors that would have ensured with N
I'VE had no war scare IN 1901. and
the country war fun Of gold. but rates
OF SO per cent and 100 per cent
could not bring money because ou'
sysfcm---or rather lack Of syatem---hat
killed our own confidence In our owl
credit We have no credit system. bal
discrealt system.
mot infrequehtly one hehra the 70
mark. 'If u be true that the Nntlona
Reserve association will democratlx'
our system and turn the hanta cal
money into the bill market 20 q lare'
extent taking II away from wal
street. why should the latter favol
the new lawr ff
The answer Il plain: 'Thla overflow
Of money. which IN times Of eas'
floods New York, and which In timeI
OF need 10 Withdrawn with such va
hemence that Il causes violent con
. kulalnnA II no biosslns but sourol
. OF danger 10 that city. While oul
4 present syatem makes New York IN,
undoubted money center ana glvel
u "a IL banks position Of preemlnenc,
ana predeminance. tilis power IA pos
sessed only az the expense of re-
sponslbility which with our prassn
system. In tifnes OF stress brings NOR
tIncntion.' The National Reserve an
soclation n enacted into law. will taxi