The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1914-01-25
J., f, COsCR|FF TALKS
ON CURRENCY LAW
Step Has Been Taken in Di-
rection of Giving Firm
Basis to Banking.
OPPOSITION OVERCOME
Financiers and Public Have
Been Educated to Pros
pective Benefits.

a step in the direction of placing
the financial system of America on th'
fl rm footing of the French system, whlcf
has been adopted in England, Germany
and France, is made by the new cur
reucy act, in the opinion OF j. T. Cos
priT president of the Continental Ma
tional bank. who discussed the new law
in considerable detail last night at the
monthly dinner of the University cluo
Mr.. Cosgriff enumerated, among the
advantages to be derived from the new
law, tho opportunity for relief of banks
i'm time Of stress, the provision for
funds necessary for business expansion
aud an arrangement whereby there may
be elasticity in interest rates charged.
The one element of weakness III the
bill. he suggests, is in the fact that the
government is unable to force any but
national banks TO come under the pro-
visions of the bill.
Mr.. Cosgriff first pointed out the
weaknesses IN the present banking sys"
TEN in America and contrasted our sys"
tenn with that Of European countries,
where the system is much sounder. he
pointed out The corrective features OF
tie new Dill anu SuoNcu ihiPiO'S
ments over the old system.
Decline of Kings.
The climax in the individual attain
ment of wealth, Mr.. Cosgriff suggests,
has been reached in the careers OF a.
Pierpont Morgan and John ID. Rookie
feller The income tax and the strinr
gent antitrust bills proposed, he thinks,
Will have the effect of turning the am
bitions heretofore directed toward the
acquisition of wealth in other direc-
tions. Mr.. Cosgrifi suggests that as the
attainments of Michael Angelo, Leo
nardo da Vinci and other great artists
of that period marked the climax of
achievement in the world of art, as the
military genius of Napoleon Bonaparte
marked the zenith of the glory or the
battlefield, so do the careers of Nor
gan and Rockefeller describe the sum
nit and mark the decline of the kings
of finance.
In beginning his address, Mr.. Cosgrif
called attention to the fact that at the
the country vigorously opposed the pas
sage Of the currency bill, while now
they accept it as step in the right dl~
rcction. This change of sentiment, he
declared. was partially due TO changes
made from the original bill TO the form
in which the measure became law, but
also largely 10 the education of the
bankers and the general public 10 the
benefits OF the bill.
Necessary Qualifications.
Mr.. Cosgriff said that to draft
financial measure of practical value it
bill 10 have, first, practical banking
experience; second. a wide and varied
experience; and third. a careful and
serious consideration of the subject. In
the first element he said American
bankers probably excelled the world.
He named Frank Fanderlip and George
NJ. Reynolds as the leaders of the prac~
teal bankers of America.
In the second element, he said,
American bankers were sadly lacking.
The average banker, he said, had ex-
perisnce III not more than three banks
aud was ignorant Of the varied prin-
ciples Of foreign banking. In all other
lines of business, he suggested, there
was opportunity for a much wider and
more varied experience.
To give the subject long and serious
Mr.. Cosgrif said, it was
necessary to eliminate eli mate partisanship and
the subject of American finance the
most careful study he said Senator AL
1rleh- whose suggestions formed the ba-
SIS for the present financial measure,
ranked first. Unfortunately, however,
in the Aldrich plan there appeared to
ne an element Of political expediency,
rather than Of sound business Judgment.
Among the other noted economists who
had given the subject earnest consid-
was President Woodrow Wilson.
False Reserves.
Mr.. Cosgriff regretted that the ad.
vice of J. Pierpont Morgan and John |
D. Rockefeller had not been sought in
The preparation of the present currency
act, but said that the state of the pub. |
lie mind was probably such as to have |
prevented their rendering material as
sistance. While they are known more |
as investment bankers rather than
,ommercial bankers, Mr.. Cosgriff |
thought their suggestions as to the eff |
fectiveness of various features of the
bill would have been Of great value.
Under the present banking system, |
The speaker said, half of the reserve re-
luIred from national banks was a false |
reserve, since it was deposited with |
remote banks and was not accessible !
when needed. The ratio of the money
in the banks of the country, he said. |
:. .d5 81 III SOiH 10 %lZsOD credits, 4
When this ratio is distributed the re.
suits are disastrous. The ratio NAV be
disturbed in two ways. he said, first by |
business expansion necessitatinp the in
,rease of credits in proportion to the |
gold or other coin; second, through pub
ic fear, causing large Withdrawals by |
lepositors
The one remedy for such conditions. |
le said, was Ia stopping loans This rem
,dy :; "a aad The same effect as applying a
liolent brake 10 swiftly moving We
iicle or running Il into a stone wall, n |
'emedy that must prove extremely dan
;erous. The new act, he believes, will |
lavc the effect Of applying the brake |
more gradually and the effect will be |
-quitably distributed in a manner not |
calculated 10 disturb business.
Remedies Inadequate.
Under the present system a shortage |
II gold may be rcmedied only by the de- |
,osit OF gold held In the United States |
.reasury. or by the receipt OF gold from |
europe In exchange for American securi-
leg RlLh rneTh ThodS y.,f1ta1 80