Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1913-08-28

SO frequently wrought devastation I'D
| this country, If not caused by this de-
| iiciency of our money system, have at
least been greatly aggravated by it.
There is Just so much currency In exis-
tence in the country. 1t is not nearly
enough to pass from hand to hand IN
every transaction. Most business Is done
on credit Because of the constant eX-
pansion and contraction of the volume of
business and the impossibility or az
least the prohibitive Inconvenience OF
cartlng the actual specie too and fro IN
every transaction. this method of trans
acting business by credits is a necessary
part Of doing business at all. 1t FOL
lows that the very great bulk OF our
business depends on confidence that the
money is somewhere and will be forth
coming when necessary. Trouble comes
when panic strikes the country ana
everyone demands specie at once.
Panlcs In their inception take the form
of run upon the banks of some locality.
If these local banks are able 10 lay their
hands on sufficient specie at the moment
TO meet these unusual demands, conh-
dence is restored and the panic is nip
ped in the bud. If they are unable to
meet the illogical and unexpected de-
nand. although they may be perfectly
solvent. the word gees out to other com
munities and the loss of confidence
spreads until IT may even sweep from
one end Of the country to the other par
alyzlng industry and causing untold mis-
cry.
Mr. Paul NJ. Warb,irg, In a paper before
the National Academy of Political
Science, hit off the difference between
our financial system as it is and as 1T
that 1t has become a classic. He COM
pared our defence against panics to the
condition Of town in the tropics built
of in1ammable material and liable to be
swept by lire, in which the ruler should
guard against fire by dividing the limited
supply of water equally among all the IN
habitants until each man had one gallon.
Under such conditions when a house
caught fire the single gallon of water
in the hands of its occupant would not
nearly put 1t out, and so when it spread
to the houses of neighbours and thence
through the whole town. At no one point
would there be water enough to check
the connaEration. The ruler ought &c
concentrate the water in reservoir with
pipes running to every part Of the town
so that when the fire broke out in on>
place, enough water could be had tC
check it then and there and prevent IT.
spread. And that is precisely what we
ought to do with our currency. There
ought to be a reserve system by which
currency could be supplied in return FOL
credits Immediately at the threatened
point, and thus check panics in the max
ing.
With the money situation in this con
dition and the principles thoroughly
threshed out by the thankess labors o
the monetary commission, President vii
son was able to foresee the likelihood o
loss of confidence ensuing upon th
enactment of a measure of radical tariff
reduction. He recognizes the advantag
to his party and policies of some imme
date currency reform. The Prcsiden
therefore is actuated by an eager desir
to get some measure of this kind passed
He Is aiming at something to prevent
panic. The economists and students o
the country are aiming at something I
prevent, or at least relieve, all futur
panics. The banks of the country NOR
than any other single element are con
cerncd in the prevention of panics.
The chief complication in the genera
effort to pass a measure preventative q
panics comes the aftermath of a re
gretable, expensive and entirely unpro
ductive agitation deriving it's impetu
from Samuel Untermyer and a group c
to be the pursuit of an alleged none
trust. While nothing came of the inveS
tigation, nor could come of 1t, becaus
money from its very nature loses II
potency when 1t ceases to circulate freel
it resulted in leaving in the minds {
statesmen of the Bryan and Henry
Texas stamp, notion that 1t would /
well by political means to regulate Il
flow of money and the condition
credits in such manner as to deprive II
larger centres, more especially Ne
York, of any advantage,
This is every whit as unsound
Bryan's former proposal to make ever,
body rich by coming dollars worth tft
cents apiece. but until understood as &
impossible and dangerous attempt to 4
nuence economic laws by political mean
it will have its influence.
To escape violent opposition on the pa
of this money trust element the Pres
dent has apparently left room in the b
notably In the provision for manag
ment of the reserves by a majority
men other than bankers, and also In q
number of rcscrves-for attempts at POI
'e' tical manipulation of this kind. And It