The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-01-08
GENERALIZATION OF MONEY.

GENERALIZATION OF MONEY.
Testimony presented to the Puio money trust"
committee has emphasized one defect Of our
banking and currency laws to which writer's
on the subject have called attention frequently.
II is the Capitalization Of q large proportion
of the money OF the country In the financial
at several billion dollars.
In communication 10 The Var0snsdn, James
Nj Quicke, Jr., an attorney OF Petersburg, who
has given much study to the currency. asks a
number Of questions relating TO It, the most
Of them bearing on this phase Of the subject
Mr.. Qnicke thinks that the accumulation of
money In the financial centers, attracted by
high rates Of interest and to be used for specu-
alive purposes IL the chief cause OF the re-
curing money stringency and the genesis of
more than one financial panic, This Is the evil
dent trend of the first four or Ave questions. the
others seeking largely an answer to the ques-
ton Of the removal of the cause.
Mr.. Quicke Is not alone In this view. In fact
It has never been denied, so far we know,
50 evident It Is The great bulk of the capital
for speculative purposes comes directly from
the banks Of New York and other financial CEN
ters and Indirectly from the country banks.
Money flows from all over the country into the
snecu1ative centers-New York chiehy-and the
Wall Street spectators do all that they can
under our loose currency laws to facilitate the
flow In the early half OF the year. when
money Is not In demand in other sections for
AGRICULTURAL and other purposes and the coun-
try banks cannot use It at home at pront. II
ia deposited IN the New York banks at "a low
rate Of interest-about per cent, Although
there are no expectations that this money will
be needed until time for the movement OF crops
It Is regarded as payable on demand and is
loaned to spectators and others in Wall Street
by the New York banks subject to recall at any
time When tho money Is again needed by
the country banks call Is made for 1t and sales
Of securities are forced SO that the spectators
can repay the loans secured from the New
York banks When the crops are large and
more money Is consequently needed by the out
of-city banks, the demands for instant payment
are insistent and Wall Street experiences panic
through the more than usually rapid fall In the
pylce Of securities and the losses due TO COM
puIsory sales by SPECTATORS on margin
One effect Of this, of course, is the rise in
the rates on call loans and some country banks.
scenting the opportunity. 70 make greater
ptoft or thes ioans TRAN possible foF legitimate
business purposes at home. send money to the
financial centers to be loaned out at the ten,
twenty. fifty and even larger rates of interest
Not only those dealing directly in securities
are affected by these fluctuations in the money
market. but these dealing indirectly and of
these are millions OF people who place their
money in savings banks trust companies and
commercial banks, for these institutions invest
q large part Of their resources In the securities
which are the playthings of the spectators
About four billion dollars-report has 1t at a
larger fgure=-is thus invested. The need OF
money to check Wall Street panic draws from
country banks restricting the amount of money
for business purposes and increasing the price
Of commercial loans. for the SPECTATORS are
using the money Of the people in California
Maine, Texas and other parts OF the Country
Mr. Quicke suggests that private profit in
banking De eliminated es t9e o"st Aeahs VI
preventing this accumulation in the financial
ctnters--one Of the reasons for the ineasticity
q our currency-and of controlling credit, What
ever the virtue OF the remedies suggested by
Mr. Quicke--aud these involve banking system
controlled and operated by the government or
by the government and depositors Jointly
there are three improvements. which. 1t seems
to as. should be made Circumsertbe bank &C
eemmodstion Of the stock exchange; eliminate