New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-14
ELIHU ROOT WARNS
AGAINST INITIATION
Continued from first page.

Continued from first page.
securities are going TO be keenly alert
regarding the soundness of the imam
cial policy OF this country. once start
n run on us and it would take very lit
tie not merely to stop foreign invest
ments but to send our stocks tumbling
back upon us, where We must buy them
and pay for them in gold And all the
gold would go to Europe. Before DC
tober. 1907. more than 100000 900 Of
securities were sent back TO us just on
the suspicion that things were not
going right. Last September over
500, 100000 came over on the judg-
ment Of some people that it would be
wise to reduce their risks.
~ am in favor Of doing away with
tho speculative money in New York.
But that is quite different matter
from doinq away with tho great masses
of our securities. which are the instru
nents Of credit. II they go down in
value the business OF tho country goes
to ruin with them.
War Would Lower Securities.
1T is we'll for us TO remember that
Europe is an armed camp. For many
years peace has been kept 10y a most
delicate adjustment and the most
strenuous Efforts OF many men I'm many
countries. But war is always possible;
the fear of il always present. II war
comes. Immediately our securities drop.
This is true I'm all countries. There
people convert them Immediately into
available gold. 1t is not necessary to
wait for war itself. Fear OF II alone
produces this conversion.
az we enter upon this career Of in
flston vs. shall do IL in the face Of a
clearly discernible danger which. though
clearly recognized, will result in a
dreadful catastrophe. Gold always
leaves the country in which the amount
OF currency exceeds the legitimate re-
auiremsnt Of business. This is an in
eyorabIe Law.
Putting II in another way. gold al
ways leaves the country OF high prices
and goes 10 the country of low prices.
You can kill people who are engaged in
business: you can destroy business
utterly. but YOU cannot stop the opera
ton OF these inexorable economic and
natural laws.
when confidence is lost YOU can
raise the rate of interest to the roof
and not bring in dollar. Long before
We wake up from our dream Of pros
perity through an inflated currency the
sources Of gold which would keep US
from catastrophe will have los: their
confidence. and no rate of interest will
tempt IT,"
Can't Issue It's Own Bonds.
Mr. Root pointed out that In the past
when an emergency arose the govern
ment itself came 10 the relief Of COM
merce and ISSUED it's own bonds To sup
ply the needed gold. That he said,
could not be done under the pending
bill.
This BILL" went on Mr.. Root, dra-
maticalIy, proposes to put in pawn the
credit Of the United States, and when
your time Of need does como in tho
United States the government itself is
discredted.'
Expressing the view that the men
who would be appointed as members
Of the Federal Reserve Board would
be of the highest character. Senator
Root referred briefly to the part played
by Secretary Bryan in the construction
of section IL. without mentioning him
by name. and declared that the mem
bers OF the federal board undoubtedly
would be approved by the authority so
potent in this particular phase of the
legislation and under the same domi-
mating, commanding and irresistible
influence"
lnuer the prONlSloIS VI iniS SeIl'oh
49," continued Mr.. Root. these men
would be bound To proceed under the
same theories that were advocated in
1896 and 1900. They can't escape it, for
these theories are In these measures
which provide that the government Of
the United States must supply an UNI
limited amount OF money for the
people.
No Authority for Action.
"Now a Democratic party, elected not
upon this issue, but upon issues far re-
moved from questions of sound money
or inflated currency and without any
mandate or authority from the people,
undertakes to reverse the oft repeated
iudament of the American people on
this settled question.
"In perhaps a vain appeal from the
Judgment Of the Democratic caucus in
violation Of the duties imposed upon
them by tho demands Of the people Of
the country, ! protest against the en-.