Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-26
WAGE-EARNER HARDEST HIT
BY PANICS. SAYS Dough AS

not obtain capital he must curtail it OIL
smut down his plant altogether. Hi:
largest cash outlay is pretty certain tc
De his pay roll. So he sets about to re.
ouce that. He may do it by laying off
part or his force, and he may further re.
trench by cutting wages. He may, as 50
many manufacturers did in 1907, close hi:
plant
Now this occasions the manufacturer a
certain temporary ACKNOWLEDGEMENTS.
ing more. He is losing the interest OF,
the money invested in his plant and the
pronts from his business But he ha:
an extended credit with tradesmen and
NE goes on with him pretty much as ii
did before the crisis came
How different is the situation for his
employees. Even If they have an account
at a savings bank, they are likely as
not to be told that they cannot get the
cash. The banks may be forced to sus-
pend specie payments. And, granting that
the cash is obtainable, the wage-earner's 5
slender savings are soon dissipated
when there is no weekly pay check to
supplement them. So. finding himself
with his earning capacity annihiIated
through no fault of his own, the work
man faces privation, perhaps actual hum
ger.
Increase in Poverty.
Sherman c. Kingsley. former secretary
of the Chicago Relief and Aid Society.
now called the United Charities. has COM
piled figures showing the effect i'm a lin
tied measure of the panic of 1907 on the
workingmen of that city Prior to the
panic. the society was spending from
$4,000 to $4,000 year. and was han
ding from 5000 to 5000 cases. In the
panic year its expenditures jumped to
Sl2o,WO, and the number of cases doub-
led. Moreover. Central Relief Associa-
ton was formed to meet the emergency.
and it spent about as much as the other
organization.
The explanation lay in the fact that
many an industrious workman suddenly
was put to the humiliation
of soliciting public charity A banking
system under which such a condition is
possible Is dlsgrace to great and pow
erful commercial nation.
There can be no permanent safeguard
for the business man. the depositor. large
or small. and the wage-earner unless
banks have permanent market for a
certain kind Of asset. There can be no
assurance that our banks will not have
to resort to the disgraceful expedient of
suspendlng specie payments unless they
pool tnelr reserves. so to put the
of all the banks behind each OF
them.
The kind of asset upon which the banks
should depend, and for which they should
establish national market. should be
commerclai paper. In Europe this paper
bonds. 1t represents actual goods in
transit from the producer to the con-
sumner. and, as they say i'm London, |
pays itself |
Protection for the Pay Roll.
Having such paper in his portfolio, with /
he certainty that he could rediscount. it 1
With the central cooperative agency. a 1
banker need never refuse to accommo-
late a customer who offered him proper
security. No employer whose business
vas sound and fiourishing need ever re-
luce his pay roll or shut down his plant
amply because he was unable to obtain
Iccommoda ton. The wage-earner would
lever be thrown out of work solely
through the workings of a bad banking
ystem. He would always be assured of
steady position and regular pay as long
S he was equipped to earn his living
Our note issues should be based on
commercial paper. instead of being bond
as they are now. 1t is only by
ringing about such a change that we
an adjust the volume of our currency
icely to the demands of business. Cur
ency founded on commercial paper must
xpand to meet the needs of agriculture, |
ommerce and industry. and automatical-i $
: contract when the need for expansion I
ad passed. If We had such a currency S