The Washington times., 1915-11-06

SuCh a proposal. WnlCn " put out w
no less authority than Paul NJ. War
burg. of the Reserve Board. In behalf
Of that body. would have astonished
the country even year ago. Two and
a half years ago. coming from Mr..
warburg or any other man Of his busi-
ness associations. It might have added
greatly to the difficulties of getting tho
Federal reserve act passed. II would
have been seized upon by some oppo-
ncnts OF GENERALIZATION as proof posi-
tive that a huge and dangerous A.
nancial monster was being built. to
hold financial domination OF the coun-
try.
But conditions have wonderfully
changed. Today. the Reserve Board
puts forth it's proposal that there ought
to be q gold stock OF q billion or two
under the central authority. and there
is not even very real interest. Tho
country has 50 soon become accustom-
cd to tho sense OF solidity and security
that tho reserve banks existence mas
given to Its finances. that II takes the
new condition for granted. has almost
forgotten that there was time OF con-
vuisions and panics. and does not stop
to think what would have happened
since the war began. II there had been
no reserve bank act.
At least It has completely emanci.
.S,b,ns rsdb ss ss fro" bank enS S'a OF the United
states would be tho capstone to q
| ..msney trust system. It Is nov
realized that the new banking systeH
1. the best possible guard against orea.
| ton Of q money trust. NJ wen as tne
surest guarantor OF financial sound
ness.
Prospeets Beyond Imagination.
In putting out his declaration that
billion or two Of gold In the reserve
banks would strengthen the nnanca
ro,ture Of the country very greatly. ant
that this condition ought to be brousn
about. Mr.. warbure pointed out M
reasons for the sta,emsnt;; ;,. ep.n noctets @ o
the people where paper representa-
| tive would serve quite as well; eoI'
that is accumulated as excess reserv'
In the vaults of banks: gold that II
short. is not kept where II can oe ~,
Of the national financial fabric. Is no
doing the best service OF which II
The American stock OF gold does no
serve the nations BUSINESS so wen
smaller gold stocks serve other cout, u
gold are not 50 carefully organized an
scientif,caily mobilized and controiieo
II is this scientific concentration an
MULTIPLICATION OF the gold power Una ina
the reserve Board wants to acconiplis
as soon as possible, in order that TN
, country may be financially ftted I
hear the great business stress that
,,l new relation to world business Is iayin
> upon It. Mr.. Warburg observed tnat
is now utterly beyond the imaelnat,o o
! OF man to conceive what the cxpanslo
: Of American banking will be In the he'
I few years.
:. Position For America.
The great creditor nations OF u
world are suddenly becoming debtor
or being closely restricted 10 their hon
a operations. The world needs someooo
else to perform the service they we
a able formerly to do, and there Is
: country with the wea,th am ,snIted ana a." state
: The demands upon the United Smte
a then. and the opportunities that tho
h demands will open. will be limited on
: to the measure of American capaci.y
: Ntilize our resources most enec'NeE.
Never was there a time when the "
=, session. proper organization. ana enc
:, live utilization Of gold was so high
" prized a token OF national power !.
p" today. The war has driven ~
countries to adopt the nOssrve mos e"e's' a,
e utilize their gold stores EVERY one
a them is preparing with all possit
n energy for the great task OF comms
J. cial Rehabilitation after the war; I
limited States, In the view or the
:, serve board authorities. wili>oe IN po
% tion, to seize and hold the worid,s lea
A. ership II it shall make the most OF
= II has.
We To Cultivate Conservatism.
Ia For the present. efforts OF the boa
O. are being directed to cultivate cons'
yatism on the part of the reser
banks: to keep. them IN mind that tn
wer. not created to earn profits. I
6 rather to serve another purpose. Il
OF stabiiizing the financial system;
convince them. In fact. that too mu
he prosperity for them would really
IN proof that they were not performi
~, ~ the very function for which they W
ia designed. It has been felt by so
". banking interests that the large capi
no tied up in the reserve banks, earn
er very little return. ought to be gi'
re larger opportunities for profit-prod
cc Combating this view, which he adm
ut Is a perfectly natural ono. Mr.. w
burg has suggested that II may
re found desirable to reduce the prop
Tomato. capital Of the reserve ban