New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-28

your committee. we have not hesitated
to quote from and comment upon the
resolution under which your committee
has acted. the language Of that resolu-
ton in its assumptions being so eX-
traordnary and in its limitations so
unprecedented as 10 call for especial
examination. But again We must beg
YOU to believe that the offered com
ment and suggestion are given with due
respect and because of our profound
conviction OF the importance OF the
whole general subject
Anticipated System Blamed.
I'm the statement submitted to you
at the close OF his testimony by II. 4.
Dawson. of our firm, We ventured TO
point out TO you that such 'concentra-
ton AS has taken place in New York
and other financial centres has been
due not TO the purposes and activities
OF men. but primarily to the operation
Of our antiquated banking system
which autom atically oompels interior
banks to concentrate in New York
City hundreds Of millions OF reserve
funds; and, next. to economic laws
which in every country create Soma
one city as the great financial centre
and which draw to it in enormous VOL
ume investment funds for the develop
ment Of industrial enterprises through
out the country.
Just as grain and cotton and manu-
features are commodities subject TO the
unchanging laws OF supply and &C.
mand. so in the same way money ana
credits are commodities subject 10 me
same unvarying laws, but far more in
tenselv. for. while bulky merchandise is
not always Immediately transferable
upon demand. money and credits are so
LIQUID as to be transferable by tele-
graph all over the world.
1T follows. therefore. that such con-
centration' as exists in New York Guy
(except that caused by our archaic
banking system, already alluded to) IS
due simply to the flow of demand and
supply. internationally likewise, when
the demand for money and credlt IN
Europe exceeds that in America gold is
drawn bv export from New York 10 the
other side"
The brief goes on 10 say:
tel mol
of economic rule for the reason that not
only the resolution "a. Res. 50h under
which your committee acts, but many
questions to witnesses. Indicated oeIel
that for their own seli1Sh enus CERTAIN
men or a group of them. have succeeded
i'm trsnscending the laws of supply and
demand (Which operate all over the WorId)
and in establishing new economic laws
We venture to point out thar since
the beginning of organized industry and
commerce, covering more than two cen
turtles in England, France ana germany
and one hundred years In America, men
never yet have succeeded III overriding
economic law; and further. that such an
achievement is impossible even though
one were willing to attribute sinister mo-
tive TO the leading men OF business IN the
chief cities Of this country.
Alarming to tho Public.
Still dwelling upon this subject. We
refer 10 the language OF the preamble,
which reads
Whereas. II has been further charged
and is generally deiicred the italics are
our OWN that these same groups Of
hnanciers are enabled to
regulate the interest rates for money
to create, avert and compose paNics.
etc.
Here is specific suggestion Of novel
economic theory the publication OF which
cannot fail 10 create prejudice throughout
y h.. as. n lt Nh
fail 20 reflect that the factors which de-
tcrmine interest rates are not local in
their source. but are worldwide, being de
termined and-owing TO the freedom OF in
ternational exchange-being regulated by
the average demand for credit throughout
the world 3 money markets.
II any one man or group Of men had
ths ability and resources-which they
have MOTTO withhold credits in any
ton would ordinarily DO promptly r..
lieved by the automatic inflow OF
credits from some altogether foreign
source.
The factor which intensified the dis
treSsful conditions in October. 1891, was
that all the worlds markets were and
during year previous-had been suffer
ing from an excessive shortage Of money.
which. as has many times been pointed
abroad. was because OF extraordinary
business Blooms in this country, Great
Britain and Germany, az we'll as adven-
titious and enormous wastes of capital
such as had been caused by the San Fran
cisco fire and the Russo-Japanesc War. In
countries other than the United States
the stress Of october. 1897 due to high
money rates and financial disturbance
was relieved by the operation of banking
systems devised by experience TO cope
with precisely such conditions: whereas in
this country. owing 10 its weak banking
prolonged and caused infinite distress.
The Panic Of 1907 Discussed.
The brief then takes up the much-criti-
cised panic OF 1907, saying:
. Our hesitation TO describe in such de-
tail these obvious causes for the panic OF
1901 has been overcome only by reason Of
the extraordinary statement In the Con-
gressional resolution above quoted and
by the report 10 us that an appreclabie
portion of the community has come 10 be-
lieve. from this statement. from the au-
thorized interview given out by one Of
your associate counsel upon his retire.
ment from your service and from other
similar statements. that I'm large mea sure
the panic OF 1907 was actually duo 10 the
Vaccinations OF certain powerful men.
I'VE regret that belief so incredible.
so abhorrent and so harmful TO the
country should for moment have
found Judgment anywhere. And We
welcome your invitation as an oppor-