The Richmond Virginian. (Richmond, Va.) 1910-1920, 1912-05-15

-r-t1t-r-~t--rt
title his address "Thc Great Case or
the People Of the Country vs.. The
Criminal Credit and Banking system.
Professor I. Lawrence laughing head
oil the department Of political science
III tbs / University # Chicago, addressed
q representative gathering o. Rich
nt;ud bankers aud business nfr that
filled the Jefferson hotel auditorium
last night
Mr.. Laughiir is nm international au-
t-'-tt+-+--
form ard author Of a number ri works
on the kindred subjects that hte used
az textbooks, ana his words carried
eight
He vas introduced hS I'residepi I,
NJ Carringtou. OF the chamber OF
commerce. and. pleasing. uutut
speaker of commanding platform ~ cs-
ence. clothing his ideas in such sim
pie style and SO entirely logical in tine
presentation Of his conclusions. that
H. held the attention of his audience
fFoa frsi 20 last.
i y he entire fault. with our banking
system. IN. LsBghlin said. was due.
to two aylls--tbe inelasticity Of our
currency system and tho inCta sttritS
Of 0ur credit system the Lending
puHeI If our banks under pressure.
liat 4cE are not dlie To bad ~. X inE,
nat to bad business. but to 81 bad sys-
tefo because banks cannot lend money
when people need It. which ne char
acteri1ed as antiauated and Of the
bacE woods tyne The groundwork IL
his arguneu' Was based on the Tcla e.
/ tiob of tho government To the banks.
/ Banking is rot governmental func-
I soft he Explained and the national
/ reserve association would accomplish
d the neeessarF Feft4rm do what the
! government could not and should not
DO tIc pointed out the dangers OF a
+ acrtral bHrk-the reserve associa ion
+ you'd take the place OF the Cen trai
bank working on the clearing i1uSe
principle and doing away with thu
danger Of centraiization~-in fact n wss
based or The decentralization idea II
would not he a proflt-tnaking nstit1t-
tion. and Il the money trust got hOld
Of II It could not use it for Its pur-
poses.
The duty Of the hour Is to pro-
! feet normal business from the tinBn-
clal sharks whether in New York
or across the Mississippi" said Mir
/ Laughlin.
There is, now, II tendency Ia cen
| trali2ation of credit. therefore abolish
H. by decentraiiZing credit. There is
Il tendency Of idle funds to flow to
Wall Street. therefore, abolish II by Il
National Reserve association and the
( f4ftAtt eHa e,t II discount mark ct There
! is n tendency of commercial capital
: To move into the hands of promo. ~;
/ therefore. abolish III by discriminate
I ing against Investment securities for
I loans by commercial banks. There is
! tendency for reserves thus wrongly
/ floating 10 central reserve cities to be
-''dfenly called for on the slightest
! alarm and causing panicS; therefore.
/ abolish 1t by IA cooperative organiza-
/ tion like a National Reserve ASSOC
j citation which would mobilize reserves
| In the interest of all, big and little"
I Professor Iaughiin said that all
I bankers who were honestly in favor
| Of a sound American banking system
/ ough, TO welcome the congressional
| investigation Of the money trust.
! If the investigation showed that gross
/ evils resulted from the present cen
/ ira lization Of credit, then congress
would have to reform the banking
! iaw2 80 that this dangerous centrali-
cation would be abolished He said
! Power of the "Money Trust"
What is the Money Trust > We
may define II as u combination of
! urge capitals for The nur""ae of con-
! 50 eit'o" great credit operations, The
! Will find his desired loan rejected by
every institution 10 whom he applies
II he does not pay the big levy de
rnended bV those In agreement In
fact, loans from banking houses to
float a large Issue m railway bonds,
-e7nuiclpal securities stock Of indus
trial congratulations on an enormous
scale. or legion of modern enter
prises are taken. and amazingly large
amounts ~ these securities are eA-
acted by the lenders for successful
promotions Since persons. or es-
tatee h8ye grown II, ~~'ss4ital beyond
all 4xpect4ti 0ns, ard Their parttctpn-
ton In loan operations ia regarded
as inspired by a selfish desire for
special gain at the expense Of the
small and legitimate, borrower.
ITO maintain this control over the
money market 10 give themselves
special advantages in supporting their
own enterprises. or those in which
they are more or less Interested, they
are very likely to invest their vast
wealth IN bank shares. In railway
,evfg;sA meg. Industrial companies and
the like BY interlocking directo-
rates, SO called. they may selfishly in
fuence loans 10 their own enterprises;
or IN time of stress, provide help 10
FaVored com nanies. while sacrfclnA
those not taken into the agreement
This in brief may be regarded as
fatr description of the Money Trust.
Wsu Streets Grin on Bank Funds.
"rher " hat is the relation of bank
ing reform 10 the Money trust :
Whether this statement az to the
methods and character of the Money
Trust IL extreme, IL is obvious that
the normal business of the country
IN huHinR and selling staple goods
OUTFIT 10 re ur0rTCted FROM IVY StTTtS=
ter financial domination by INN Mediate
and suitable lnirtslation. Then, we
ask. would National Reserve assoc |
station give this protection The vast |
mass of local loans the country over |
II based on the production of staple /
-oo"r md their distribution to the /
customer. on the other hand. az
things now 20. our banking system en- /
coufs.ges the flow 81 surplus funds to !
used In speculation. or in furtherfng |
s-~t.o+ rrorr c''0w-s
Which should be favored? There |
ran he no doubt as 70 The answer. !
The essential purpose Of the Nationa! /
Reserve association is 10 separate /
these two Kinds Of operations, and to /
favor rA-euinently Ioana 10 those |
doing a strictly commercial business
as opposed TO speculation and promo |
lions. A a basis for foanS. there Is |
IA vast difference. as affecting the per-
nanent prosperity Of the country, be-
tween commodities passing from thc
IN Af