The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-10-31
Railroad Man and Bank
er Caution Business
Interests.
BANK IDEA
AGAIN INDORSED
Defect Of Glass Bill Is Pointed
Out as Starting the Country on
an Issue of Fiat Currency.
Nation Is Declared to
Be "Water-Logged"
With Bonds.

Chicago. Ill. October 3o.-James j.
Hin and Frank y. Nsudcrlip. speakers
to- night at tho banquet that closed the
convention Of the Investment Bankers
Association Of America. each sounued n
note OF warning TO the business in
tcrests Of the country
Mr.. Iill, whose subject was RAILROAD
Financing Of the Future" declared that
the country is watcr-logged with
bonds"
Confidence cannot be restored" he
said, until the name bond has won
back something Of It's old standard"
Mr.. Nanderiip. speaking OF the pend
ing banking Legislation, insisted that
Congress was in danger OF adding on
the country ruinous policy OF fiat
money
The fatal defeat OF the Glass bin,
ne sad. is that ii starts tho country
on an issue OF fiat currency The
notes proposed are HAT notes The5,
have no reserve whatever provided by
the government, and they arc to bc
lent without limit 10 The number OF
banks
There is no case In ali history where
nation has started on an issue OF
hat money that tn. result uas not been
complete breakdown OF tho financial
system OF that country"
single Central Bank.
Mr. Nanderlip urged, instead Of re-
Eional banks, 4 single central bank
owned by the people and under govern
meut contrbl Regional banks were
dangerous, a. local climate ana cron
stresses would affect the entire rcpion
competition for reserves among re-
sional banks and forced invest,ncn, h,.
national banks In regional bank Sc
cutities were also fatal objections.
he declared
\ believe the inteilectual Judgment
OF eVeFE member or the Senate com
ihittse approves sucf a plan said MIR
Nanhcrlip. "Bu, the fact thar ,ho
House Is committed 10 a lcxion.I so
tenn IS a serious obstacle The disno.
s''ion OF the President not even to dis
cuss any other plan than the Cl.ss
Oven I'm Is an obstacle.
declaration Of tho Baltimore
s;.r,s,,. rv,'ion against a central bank is a
oiincuity Were ii not for these. thre..
Things. | have no doubt that the ssna,e
committee would he well on their ,,.a,.
to-day toward completing IN. bin for
such central institution,
. u mop" Tor tile removal OF these
obstacles TO sound Legislation" said
Mr.. Vanderlip, lay in the creation ~
punlic opinion that would he felt bv
the senate -
Would Shock Country.
me true story OF all ,nuuicipal in
"'oteuhtsS now concealed behind Va
f'.ua temporary makc-shif,s 50 ae RI
MAINTAIN IN ostcns!ble ccrdi, and holm
rusn ou' me annual crop OF new or r.-
iunalhS ponds could be told, sai,l Mr
itill, IT would shock the country ana
si!c pause even To the advocates of
poses. P"i
The situation with regard TO bonds
worse The field is so large ana 81 AZ
verse as 10 defy statistical tabulation
hunureds OF millions OF bonds b.,.
been issued TO promote consultations
these securities being part OF the pur
chase price of the smaller coucarns ~
he united in one big corporotion on,
hundreds of millions have been issued
against property still to lie dcvclop.d
suc! US mines. timber lands. irrigated
lands and even ordinary real estate
mere many separate holdings are com
hined In the hands OF an active selling
or developing concern These ar, ~
varying degrees OF soundness. from,
the bond with property behind il that
would fetch face value ut n forced
sale at any time. to more speculative
pledges or future realization OF in
crement that Is little better than q
guess. Finally, there is the enormous
mass. recorded only locally and beyond
any reliable estimate in amount. OF
bonds that are not. in view OF the
nsmsy or insufficient security behind
them, entitled 10 be called ho,ds ~
all"
Mt Hill said the place OF the share
OF stock has changed little
Criticism of Bonds.
Continuing his criticism OF bonds.
he said:
Formerly and always in any prop
eriy hnancied undertaking, the limit Of
a BOND issue is the total cash value OF
tangible property In possession Under
this rule the investor might rest se-
cure. Now il is altogether different
Not only wildcat concerns. which are
outside the range OF this discussion
but companies of real merit and sol
Vehcy' 40 not hesitate to bond their
business for very much more than could
be obtained from either n forced sale
or n careful liquidation
Criticism or even a proper under
standing OF the situation calls for dis
crimination between the classes into
which bonds are divided First mr..
those of public bodies; the government,
states, counties, cities and sometimes
villages. Here 81 frlghtful imitation
Is going on An old shioned public
aversion to debt still holds the nation
and TO some extent TIL" States in check
without undue preference for the
interest to which most of my active
life has been given. think may say
that the railroad bonds OF this coun.
try. as rule. have remained faithful
10 their trust.
"fhe remaining class OF bonds. those
OF public utilities. require no separate
discussion. Water bonds in most cases
stand on the same footing rs those OF
the municipality; gas and electric light
bonds are simply special form of i'm
dustrials: while street railway bonds
resemble those of the steam railways
IN fr. lit.
Continued On Second Pago)