Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-07-31
Head of Treasury Shows Money Is Easy and
Predicts New Federal Reserve Will Aid
n MeTlae Big Crops
ACT WILL PREVENT FINANCIAL PANlCS
In an Interview In the New York MorId, MCAd0o
Saws Administration Has Done More to
i1elO Business Than Predecessors

deter me from again accepting COM
commercial paper as security for Gov
ernment deposits. All paper accepted
by thet Government is passed upon by
clearing house committee in each
city and a special representative of
the Government. And, in addition,
each piece of paper must be endorsed
by the bank offering it. So the Gov
of the bank behind the paper, but the
responsibility of the makers them
selves. Last year the Treasury de-
posted $37,386,000 almost wholly
against this kind of paper Every dol
lar was paid back to the Treasury on
April 2, 1914, and the Government re-
ceiyed as profit, at per cent interest,
67,s44.51.
The Claflin failure, by the way, SIM
ply proves all over again what has
been proved thousands Of times be-
,, ;;vre-the futility of over-expansion.
Neither tariff laws nor alleged de-
preston were responsible for that
failure. 1t is the old familiar cry
of biting off more than you can
! chew" 1t also proves the economic
fallacy Of too much consolidation.
The combination of thirty retail
stores in as many separated cities
got beyond the available capital OF
the mother concern, and also beyond
the limits Of eficieffcy."
viii Il Prevent Panics?
When the Federal Reserve Associa-
ton is in working order, do you be-
lieve that it will prevent panics?
Answer-Assuming wise admins
tration, and that, think, is certain.
the new system ought to prove sue
cessful preventive of financial panics.
And why shouldn't we assume wise
administration" of the system? The
able American mind is not yet obso-
| lete and patriotism is not yet dead!
There is abundant material to draw
! from, not only for members of the
Federal reserve board, but also for
directors of the Federal reserve
banks. We are usually the slowest
people on earth to correct our own
abuses, but when we once begin the
job we generally do it thoroughly.
We have been trying without avail
for almost half a century to reform
our banking laws, and then, all of a
sudden, we woke up and put upon the
statute books the most far-reaching
and beneficial piece of legislation
since the national bank act
I look forward to wonderful per-
iod of financial stability, with its in
evitable complement of undisturbed
confidence, and to an era of unequal
led prosperity for this country, un-
der the new Federal reserve sys-
tenn
The provisions Of the law which
permit our banks to establish foreign
branches, together with our new tar
if law, will contribute beyond the ex-
pectations Of even intelligently opti-
mistic men to the expansion Of Am
erican trade and commerce. A big
foreign trade will, Of itself, tend great
ly to stabilize our domestic trade and
make extremes of business depression
at home far less possible. Our for
eign trade has always been restrain
ed by unwise tariff laws and lack
of American banking facilities. The
new laws have removed these oh.
taclee.
What do you think of the outlook
for the future?
Answer think it is splendid, not
withstanding the fact that the die-
aster doctors have been working ov.
ertime to make the nation sick. They
seem willing to wreck business and
bring suffering upon the innocent In
order to destroy the administration.
simply because the administration is
destroying privilege and re-establish-
ing true democratic government. But
they haven't succeeded and they
won't succeed. The general business
situation Is inherently sound and our
financial position Is exceptionally
strong. The greatest winter wheat
crop on record Is already secured and
the Secretary of Agriculture reports
(Continued on Page Two)