Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-05-10


!, p. Morgan, Americas greatest ~
naneled. So he told the special con
oressionaI investigating committed
when ne appeared on the stand not
long before his death, and 90 he and
his partners maintain In the follow
ina letter. This letter, which has re
ceived wide comment from bankers
and business men Of Hawaii, 10 re
oarded 40 4 remarkable contribution
20 the many contributions on money
and credit. u IL written from Messrs'
J. p. Morgan q Co. at the invitation
q the subcommittee Hon. A. p.
PuIo, ehalrmanl Of the committee on
banking and currency Of the house OF
representatives.)
You have invited US to supplement
the recent inquiry Of your committee
by presenting such considerations as
may occur to you (us) bearing upon
the question Of concentration and con-
troll of money and credit"
In presenting such considerations
we find IL necessary to reyent to the
original preamble and house resolu-
ton No. 504, 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-
ton, as possibly existing and so call
ing for investigation and remedy, do
not and cannot 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 q certain theory as TO
money and credit, which theory 1t
viii be impossible ever to demon
strate; for It's establishment is, and
always will be, prevented by eco
nomic laws which have operated
ever since the beginning of barter
and trade.
Banking System 1T Fault.
We suggest to you that such Ills
and they are neither few nor trifling
las are existent in this country's n
nancial affairs ere the outcome Of a
clumsy and outworn banking system
rather than or the schemes Of men;
and thar TO- eradicate such ills at
their souroe, there - needed not leg
islation upon some one or more iso-
lated symptoms, but rather q careful
diagnosis Of our whole banking sys-
TEN; study Of the successful sys-
TENS Of other countries which for de-
cades have been free from the peri
cdic panics 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
Las contrasted with piecemeal-leg-
islation.
In the following considerations,
which we offer with respect and with
an earnest desire to cooperate with
your committee, we have not hesitat-
ed to quote from, and comment upon
the resolution under which your COM
mittee has acted, the language OF
that resolution in its assumptions be-
ing so extraordinary, and In its inti-
nations so unprecedented. as to call
for especial examination. But again
We must beg you to believe that the
offered comment and suggestion are
given with due respect and because
Of our profound conviction of the i'm
VOl J0uCG vi CllQ " llOlC 6CnCa al oUoJCOt.l
In the statement submitted to you
at the close Of his testimony by Mr..
H. p. Dawson of our firm, we ven-
tured to point out to you that such
concentration" as has taken place in
New York and other financial centers
has been due. not to the purposes and
activities of men, but primarily 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 eco
nomic laws which In every country
create some one city as the great fl.
nancial center, and which draw to 1t,
in enormous volume, investment
funds for the development of indus
trial enterprises throughout the
country.
Supply and Demand q Factor.
Just as grain and cotton manufac-
lures are commodities subject to the
unchanging laws of supply and de.
mand, so, In the same way, money
and credits are commodities subject
to the scame unvarying laws, but far
more intensely; for while bulky mer-
Chandise Is not always Immediately
transferable upon demand, money and
credits are so liquid as to be trans
ferable by telegraph all over the
world. It follows therefore that such
concentration" as Ssts in New
York City texcept-sAsj used by our
archaic banking s. lready al
luded to- is due simp, = flow of
demand and supply. >ionally
likewise, when the dema4 Money
and credit in Europe exec in
America, gold is drawn vt
from New York to the other N
No one will deny that me-
uuently are selfish. ambitious
but in order to sustain
theory that the panic of 1907 was ''e.
gineered", one must attribute to the
"engineers" not only the power, but
some motive for their assumed
achievements. And by no process of