Bisbee daily review. [volume] (Bisbee, Ariz.) 1901-1971, 1912-11-10
SAYS PANIC IS
DANGER RESULT
New York Controller Says
Central Bank Organiza-
tion Means Finan-
cial Safety
SEES TROUBLE AHEAD

Edmund y. Fisher, Deputy Control
Ter of the city OF New York and a
prominent member OF the National
Citizens league, in an address deliT-
cred recently before the Master Print
ers' Cost congress warned his hearers
that unless a central banking organ
ization OF some kind should be devel-
oped within the next twelve months
another currency panic would con
vulse the country within two years.
Mr.. Fisher said:
The plan of a central reservoir Of
reserves as a basis for currency and
credit to meet the demands of bus
mess has been adopted by ali enlight-
ened nations except the United States.
Even so small a country as Switzer-
land is the latest 20 join the ranks
and organize a central banking insJi-
tuition 10 supply the varying needs Of
the merchant, the manufacturer and
the farmer.
Our Periodic Panies
Time and again this country he's
suffered from its bad financial sys-
tenn; time and again there have been
attempts to correct this system; but
again We have the old story Of large
business with inadequate financial in
struments with which 10 handle it,
Fortunately, this is year of great
prosperity and extensive crops and
we are on a relatively sound monetary
basis, but a note OF warning should
nevertheless be sounded to the effect
that unless a central banking organ
ization is developed within the next
ic will confront us before we are two
years older. Therefore you who rep
resent different sections OF the United
States should return TO your home
communities with the thought that it
is absolutely necessary for you to give
some attention TO the question OF eX-
ternal costs.
Need for legislation
The vital way to do this at the
present time is to induce your var
ious congressman TO develop and
enact legislation Tor banking reform
as statesmen and as politicians"
Discussing the general banking sit
uation and some special phases Of the
present financial situation he further
said:
During the last decade the nation
al bank notes in circulation have in
creased about 100000, 900 Under
our confused banking system these
notes are equivalent to gold as re-
serves for state banks and trust com
panies. At least % per cent OF this
new growth, or 800, O00, 900. has been
so used. As the average reserves Of
this class of financial institutions 10
H. "A I1H
GOO OF national bank notes has be-
come the basis of an increase Of 81
100000 Of deposit imitation, or IS per
cent Of the entire growth Of the de-
posits Of state banks and trust com
panies during the period mentioned.
a Burden TO Business
AS bank deposits ordinarily are
exchangeabIe for currency. this l.000,-
000, in effect, has been added to the
currency of the country. has thus
tended TO materially increase The
prices Of commodities and has be-
come an added burden to labor and TO
business. During this period cOmmod-
ity prices have increased at least %
per cent, and writing paper. ledger
paper and bond paper, all OF which
are used by the printers of the coun-
try, have increased in price about %
per cent. While the rise in prices has
OF course had many causes. the par
ticular cause referred to has been a
dominant factor
The present financial condition Of
the country gives a fair illustration Of
our defective banking system. The
law requires an inflexibIe reserve
ranging as high as % per cent in the
largest cities OF the country. and the
vast gold reserves which are the basis
Of our credit are virtually unavailable
al this time for the purposes OF our
growing business, and we are placed
in the absurd position of being COM
PEELED to buy additional gold In Eu-
rope at a high cost or to fall on our
knees before the secretary OF the
treasury for the transfer of a portion
Of the government reserves to the ma
tionsl banks"