The Washington herald., 1913-09-02

bin labored and halted and was subject
Ito revision in caucus. This bother about
banking and currency reform. inelasic
currency, liquid assets, mobilization OF
reserves, discounts and rediscounts-Wlth
a tendency towards more involved words
1.-THE longer Congress- discusses the subject
lis confusing to the public mind
The elements OF the matter are so
simple that a plain man can understand
them IL he chooses. When he does and
also realizes that all the talk is about
something that can touch his pocket
hook right where il rests, then he be-
comes quite capable of saying TO the
lawmakers, Here is the one thing that
you must adjust"
The simple fact is this: In the laws
governing the more than 1000 national
banks, no comprehensive plan was work
ed out in war times nor since, except In
the existing emergency measure, passed
May 60, 1908, authorizing National Gun
rency Associations, whereby these banks
can come to one another's rescue when
confidence is shaken or a panic begins
Since February 25 1853, the National Bank
Act has been subjected to ten amend
ments and supplements in the SOS,
Itxenty-three in the los, eleven in the
Ss, five in the SOS, and thirteen since
! 100.
| 4 descriptive figure may make the point
regarding rescue more clear. If your
hand is cut and your health Is good
thers move from all parts Of your body
towards the point OF attack those ele-
ments Of the blood that tight poisonous
invaders. In a few days you have moth
| ing but a scar and a memory. Without
the defense that comes from all the
bodily powers working together for the
health of the body as a whole, no wound
would be trihing. but every one could
| be dangerous locally and might be fatal
to the body. This illustration so exactly
fits the banking situation as We now see
| IL, that each thinking man can at once
see what is our banking weakness. II
is the lack OF legalized mutual helpful
ness among national banks nearby or lar
separated from each other.
Human experiences has shown all along
the line, as we have come TO good sense
that cooperation pays. 1t has been work
ed out in the social rules that hold US
together in peace. 1t has been proved
in business that the prosperity OF all is
better than the bankruptcy of rivals. 1t
has been shown a hundred times that the
most sensitive business in the world, that
OF banking, does harm and no good
through failures and can poison and de-
stroy the whole body OF credit. II one
member suffer all suffer with IT." We
TOW know that wounded credit in one
are worked out whereby all solvent banks
can rally to the rescue and thhs restore
health, exactly similar TO the restoration
Of the injured hand described above
The above defines all that needs De
attempted in reforming our banking laws.
II hardly appears so simple If We read
the Owen-Glass Federal Reserve Act, or
any other Of the more than twenty bank
ing and currency bills introduced IN the
-
Another figure: Those Of us who know
the seashore also know the fiddler crab.
In moments Of sunshine or confidence
his kind will swarm by hundreds on the
sands, each busy about something essen
tiaI 10 Il, and all seeming TO show a
community of interest. a sudden cloud
or the sound OF a footstep will startle
first one and then another. In a mo-
rnent the hundreds scuttle to cover, each
intent ealy on saving himself. Just thus
have We legally bound our national
bankers to be when the cloud of doubt
comes I'D, The well-off bank must hold
its cash to save itself and its clients.
We have actually made IL dangerous for |
one TO help another, though, in some in |
stances, it is done at risk, as will be
shown by the answers to the most re-
cent query Of the Comptroller Of the |
Currency. mailed August ..
Our Second weakness.
A second weakness Of our banking sys-
TEN is a little more difficult to make
plain. If, however, il could become uni
versaIly understood. then all panics
would be known as foolish. To make the
explanation, we must go pretty far back.
But on that backward journey to the
early times of barter we must carry with
lis one clear conviction-money and
wealth are two distinct things. Wealthy
men have existed without money. Abra-
ham, the father of the faithful, was rich
in sheep, goats, and cattle. With these
ne traded for other things he wanted.
He and his simple day passed and were
succeeded by the clever invention of
money. which obviated driving around
A lot of lowing kline or cackling geese
when trading was desired. Money be-
came the universal emblem of wealth
otherwise too cumbersome to swap
easily.
But neither then nor now can money
ever be coined sufficient to represent all
wealth. Wealth has come to be spoken
Of in terms of money, because money
IS so easily understood. An Illustration
will help here The farmer says: II
own 100 acres" He thinks in terms of
land or cattle or what-not, and he Is
correct. for wealth consists of posses {
sions that can be used for some purpose
Or another. Along comes the assessor,
however. He says to the farmer: 'You
are worth so many dollars" He bases
MS estimate upon the amount of real
money that would pass hands IL the
farmer found a buyer for his land or his
,attle or his other possessions.
In course of time the invention of
money was followed by an invention still
more monfentous, for it comes near to
urning wealth into money. That inven-
ion is credit" device whereby actual
money need not pass from hand to hand. ,
70 repeat money and wealth are two j
listinct things; but credit and wealth
ire inseparable Credit based upon ,
wealth is spoken OF in terms Of money ,
or the sake OF convenience in express
ion, but It is not money. ,
Our Actual M0ney Total.
1t will make this still clearer IL We
emember that all the real money in the
United States was on July OF this year ,
:, 81, ,S260o7. or $3l.64 per capita on an
population Of $3.50 We
ave a per capita larger than either :
England. Germany. Italy, the Neither ,
ands. or thirty-six countries, so that !
ur troubles are not due to shortage of i
On the other hand, the true
aluation of real and personal property 4
n the United States was found to be in 4
Qok G10- 10I and ia Naur op-aa fip tn .