The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1914-02-23
AMERICAN SPIRIT
in RESERVE ACT.
National Capacity to Arrive.
Well Illustrated by the
New Legislation. I
REFORM FOLLOWS DELAY.
Important Effect of the New Law on
European Finances Already Is
Being Made Apparent.
REFORM FOLLOWS DELAY

The irresistible expansive power Of the
United States. both in contact and exam
pie, is something with which the whole
world has had TO reckon now for hun
dred years Les Americans they do
arreeve." exclaimed Sarah Bernhard
How they arrive, politically. financially or
otherwise, they never seem TO know or
care. But they do get there, and they
know IL. They have grown in that
sbounding self-confidence that effectively
declares that individual faith removes AL
individual mountains. The Revolutionary
army fought without Constitution, and
the colonies failed in their first attempt
to make one. When, however. 1t was seen
that the deficiency was in the power TO
tax, they made new Constipation that
needed no tax amendment for more than
a hundred years. Taxing incomes had
rot been dreamed of by our Revolution
airy forefathers. Full confidence is
growing in the new currency act that IL
II is found faulty anywhere we may
easily amend it.
Our Banking Extravaganza.
The deficiency in our banking system
was in the extravaganza of our fixed re-
serves. our lack of an outside, or in
vestor's discount and acceptance market,
and thirdly our lack OF centralized con-
troll over rates and reserves
When we have sufficiently demon
strated our independence OF all foreign
financial advices and examples and also
our ability TO be the most extravagant
nation in the world as respects bank To
serves and gold hoardings. and panic
penalties, We suddenly reform every
thing altogether.
Under the present bill We are to prac-
ticaIIy abolish any fixed reserve. All ma
tionai bank reserves are cut to mere
,,A ha
real reserves are set up with the new
Federal Reserve banks, TO be later trans
muted into book credits, for exchange
and discount purposes, and to be even
tually. as the country expands, covered
many times over with the new form OF
currency. And here again all reserves
may be suspended in time OF need.
There will be centralized control over
some reserves and over reserve rates and
discounts. Acceptance markets and
branch banks may be set up nationally
and internationally. With reduced cost
for check collections and ability to inter
change government bonds, government
paper and gold. or to purchase the latter,
We have started TO remedy all our de-
ficiencies in finance at one sweep and
have tossed the whole into a Federal
reserve board. yet to be named. We have
been slow in preparing for the change,
sweeping a change be so suddenly made
and so generally accepted.
Independence OF Citizens.
We Americans fought without a Consti-
tuition. but under q Declaration OF Indie |
pendence. We continue TO fight under the |
banner of our independence rather than |
under the restraints of our Constitution |
Under that banner we absorb a million |
raw recruits a year and carry forward
socially and politically just bit of dare |
devil lawlessness that resists the police, |
cusses the courts, condemns the old way
and seeks the new.
We use blood and muscle and vocal
power most extravagantly; compete with
sist in blowing two acres where one
would raise the same crop, under proper |
cultivation, and delight in pocket bill
rolls and the jingle, of pocket silver and
gold.
This is the progressive, arriving Amer |
lean spirit that laughs at schoolmasters, |
judges, banks, economists, and property |
accumulators: will scatter gold in the
street IL il elects. or make a minimum |
wage of s. per day for Office boy and
scrub woman, Just as a social expert |
ment and in defiance to all precedent.
This is Uncle Sam with high hat and
bursting trousers that have to be strap |
ped under his boots to keep them on. |
He will polish his hat and change his |
financial suit when he "durn pleases"
and when he does he is perfectly will |
ing all the world should take notice. |
He would not be Uncle Sam il he did |
not set the pace" when he starts for |
a new fashion.
Senator Owens is perfectly right when
he says that the wonderful transfer
nation in European finance, which has
taken place thus far in 1914, is due
largely to the passage of the American
currency bill.
Optimism of Paish.
Sir George Paish, OF the London Stat
ist arrived in this country in Novem-
Der with the most pessimistic senti-
ments for the world outlook. In New
York and Boston he studied the bust
ness and financial situation to the wee
small hours" of the mornings and then
went down to Washington to contem-
plate Uncle Sam and his currency pro-
posals. He saw a new light dawning
in the world. 1t meant Americas two
billions of gold to be unlocked for world
wide commerce. He returned to Eng
land and told Europe that 1914 was to
be a year of financial restoration. Eu-
rope now sees the new light, and sees
it more clearly by reason of broader
bankers.
1t may not be amiss here to say that
the writer of these articles was sur
prised to learn recently that they were
into German and sent to for
eign bankers as quickly as issued.
1t may also be here added that the
numerous requests received for these ar
-icles in book form cannot now be COM
piled with. They are a discussion of
American and worldwide finance for the
lay and the hour.
People who think that America is go
ing to have a European financial system
nay be reckoning without their host.
Discount Plans Slow.
Those who think there>is going to be
immediately established an international
discount market attracting foreign capital
viii probably have occasion to revise their
'lans. The greatest free trade market
n the world is within the forty-eightl
American empires now called States. The
Ireatest investment discount market in
he world could be made right here, and
n interstate note market may yet be
ct up under our new banking system and
ival, if not surpass any European dis
cunt market, before European investors
an be attracted into an American bill
market.
Europe knows very little of our quick
ystem OF communication, our jingling
telephones. and flashing public press, or
{ our high beating financial pulse She .
still as timid concerning the size of
srother Jonathan and his ability to ..eat
u AL creation" as she Ia fipoorarS eel