The Alaska citizen., 1913-06-30

Messrs. J P Morgan X Co. in res committee Of the Committee on Banking and Currency of the House of Representatives The members ef the above firm of financiers were called as witnesses before the com. mittee and after giving their tes- timony were requested to give their views of the money question in written statement:
 To the Honorable A ] Pujo. Chair
 man Committee on Banking and
 Currency, House of Represents
 tives. Washington. D. C.
 Dear Sir:
 You have invited us to supplement the recent inquiry of your committee by presenting such considerations as may occur to you tus) bearing upon the question of concentration and control of money and credit
 In presenting such considerations We find it necessary to revert 10 the original preamble and house resolu tion No. 5O4, under which your com mittee acts and at the outset to sug- gest that, in the main. the conditions described in the preamble and resolu tion, as possibly existing and as cail ing for investigation and remedy. do not exist in this or in any other country We would suggest further with the utmost respect, that a large part of the valuable time of your committee in our belief. has been consumed in an endeavor to piece out certain theory as 10 money and credit, which theory it will he impos sible ever to demonstrate, for its establishment is. and always will be. prevented by economic laws which have operated ever since the begin ming ,' s.-ser and trade.
 eAh.,...I oYSTEM AT FAULT.
 We suggest to you that such ills and they are neither few nor trif.na as are existent in this country $ financial affairs are the outcome Of a clumsy and outworn banking system rather than the schemes of men: and that to eradicate such ills a their source. there is needed not leg islation upon some one or more iso- lated symptoms. but rather d careful diagnosis of our whole banking sys- tenn; study of the successful sys- tems Of other countries which for decades have been free from the periodic fanics which have distressed this country; and finally cooperation among all committees in congress which consider this subject, to the one end Of wise and comprehensive as contrasted with piecemeal-legi lation.
 In the following considerations, which we offer with respect and with an earnest desire to cooperate with your committee. We have not hesitated to quote from, and com ment upon the resolution under the language of that resolution in its assumptions being so extraordinary and in its intimations so unprece- dented, as to call for especial eX- animation. But again We must beg Irl; tLa. Eo ment and suggestion are given with due respect and because of our pro found conviction of the importance of the whole general subject.
 In the statement submitted to you at the close of his testimony by MT II. P. Davison of our firm, We ven tured to point out to you that such concentration" as has taken place in New York and other financial cen ters has been due, not to the pur- poses and activities Of men, put pri- marily to the operation of our antiquated banking system which automatically compels interior banks to concentrate" in New York city hundreds of millions Of reserve funds; and next, to economic laws which in every country create some one city as the great financial center. and which draw to it. in enormous volume, investment funds for the development of industrial enterprises throughout the country.
 SUPPLY AND DEMAND THE
 FACTOR.
 Just as grain and cotton and manu- factures are commodities subject to the unchanging laws of supply and demand, so, in the same way, money and credits are commodities subject to the same unvarying laws. but far more intensely; for while bulky merchandise is not always imme- diateH transferable upon demand, money and credits are so liquid as to be transferable by telegraph all over the world. It follows therefore that such concentration" as exists in New York city (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