The weekly chieftain. [volume] (Vinita, Craig County, Okla.) 1905-1913, 1912-05-17
MUNtY IRUSI UURB
NEED OF THE HOUR
Chicago Economist Tells Business Men
Credit Capitalization Must Be
Abolished.

in New York or across the MISSISSIPPI,
said ]. Laurence Laughlin of the Uni
yersity of Chicago. in an address on
The Money Trust and Banking Re
form" before the Richmond Chamber
of Commerce today.
There is, now, tendency to cen.
tralization of credit; therefore abolish
it. by decentralizing credit. There is
a tendency of idle funds to flow to
Wall Street; therefore abolish it by a
National Reserve Association and the
creation of discount market. There
There is a tendency of commercial cap
ital to move into the hands of pro-
moters therefore, abolish it by dis
eliminating against investment secur-
titles for loans by commercial banks.
There is a tendency for reserves thus
wrongly floating to central reserve
cities to be suddenly called for on the
slightest alarm and causing panics;
therefore, abolish it by cooperative
organization like a National Reserve
Association which would mobolize re-
serves in the interest Of ali, big and
little"
Professor Laughlin said that all
bankers who were honestly in favor of
a sound American banking system
ought to welcome the congregational
investigation of the Money Trust" If
the investigation showed that gross
evils resulted from the present cen
traIization of credit. then congress
would have to reform the banking laws
so that this dangerous Capitalization
would be abolished He said.
Power Of the money Trust"
What is the Money Trust? We
may define it as combination of large
capitals for the purpose of controlling
great credit operations The man who
has a scehme to be financed will find
his desired loan rejected by every in
stitution to which he applies, If he
does not pay the big levy demanded by
JuOcC al dbA IL AaSAf AOallS
from banking houses to float large is
sue of railway bonds municipal Sc
culities, stock of industrial reorganiza-
tions on an enormous scale, or legion
of modern enterprises, are taken, and
amazingly big amounts of these securi-
ties are exacted by the lenders for
successful promotions. Some persons,
or estates, have grown in wealth be-
yond all expectations and their partici-
patton in loan operations is regarded
as inspired by selfish desire for spe-
cial gain, at the expense of the small,
and legitimate, borrower.
ITO maintain this control over the
money Market to 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 com
panies, industrial companies and the
like. BY interlocking directorates, so
called, they may selhshly influence
loans to their own enterprises; or. in
time OF stress, provide help to favored
companies. while sacrificing those not
taken into the agreement. This. in
brief, may be regarded as fair de
scription of the Money Trust
Wall Streets Grip on Bank Funds. |
Then, what is the relation Of bank
ing reform to the Money Trust?'
Whether this statement as to the meth
eds ard character of the Money Trust
is extreme, 1t is obvious that the nor.
mai business of the country in buying
and selling staple goods ought TO be
protected from any sinister financial |
domination by immediate and suitable |
egislation. Then, we ask, would Ma
ional Reserve Association give this .
protection? The vast mass OF local
oans the country over is based ON
he production of staple goods and /
heir distribution to the consumer. On
ne other hand, as things now go our
anking system encourages the flow
/ surplus funds to financial centers T
here they can be used in speculation,
in furthering great promotions.
Which should be favored? There T
an be no doubt as to the answer The
s~ential purpose Of the National Re
srve Association is to separate these
20 kinds of operations and to favor
re-eminently loans to those doing a
richly commercial business, as op-
)sed to speculation and promotions
ga basis for loans. there is vast diff
renee, as affecting the permanent
osperity OF the country, between /
mmodities passing from the pro-
Ger to the consumer. and the invest
ent securities in capitalized form of
: organizations producing the COM
odities. Loans supported by the for
:, o~a chnrt-ti and commercial.