The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1916-04-29
Continued From Page One.l

4hs0c40n GAUuS our COASSs II IN USE
less TO discuss the folly of such
methods, they are obviously ineffi-
Gent We would most certainly
send them to some central point, to
protect that particular territory
against invasion, rather than scatter
the force and thus weaken the very
fabric of defense.
'9The same theory holds true when
applied to the mobilization of gold.
1t would be wasteful and inefficient
to scatter the money In various
places and rhus render It less effec-
tual.
Another very important reason
is that practically ali the nations Of
the world had established govern
mental banks, or intended to estab-
lish them and to safeguard itself the
United States had to establish a svs-
tenn of federal reserve banks to in
sure its on self protection among the
nations of the world.
mot only from an international
standpoint Is it advisable, but the eff
fects in our own country win justify
| its establishment and the damages
of constantly recurring panics, due
to the initiation Of credits, which is
impossible under the federal reserve
system, viii be greatly lssend."
Here the matter was given free
discussion and the necessity of the
members Of the reserve bank telling
the absolute truth In regard to Sc
curities was brought out and empha-
sized.
At this point the speaker dis
cussed the establishment from a po-
litical end and said that it was the
only measure of the democratic par
ty that the republicans had not at
tackled, and that while the two presi-
dents preceding Mr.. Wilson had had
opportunities for passing the aei
they would not for fear Of the party
lines.
NO "RED TAPE"
Here he refuted the accusation Oh
''too much red tape" which has beer
SO frequently brought against the re-
serve banks and explained that what
appeared to be red tape, and chafet
| the bankers so, was really ties Of
their own making, and was directly
attributable to the lack of prepared
ness on their part in not having tn,
banks papers IN the proper shape
4 Then Mr.. McCord took up the poin
made by Mr.. Welton, that the reserv'
system was not elastic. Mr.. WeltoI
objected on the grounds that he ha,
not said that the system was no
elastic, but that it allowed no elastici
ty IN the currency law, but Mr.. Nc
Cord discussed the question alon,
these lines for the better understand
ing of all. He said that there is al
elasticity, and last year an elasticit
. Of four millions of dollars, which eS
panded in the fall of the year, an
this spring, had contracted.
"A great pripSeiiceb the 49,, vai ne
lays stress upon, is the pron,n
payment of debts, there can he mo 70
newai under the system, which helm,
much IN the establishment of credit
Tor credit is matter of pronon+
payments, and should extend itseIl
not only in dealing with the federa
reserve banks, but its value win fin.
ally make it more general and IL,
effect will be widespread"
This phase of the question wa,
1ully discussed in the meeting. sew.
eral bankers taking part. Mr.. Me-.
Cord said that he ALWAYS attAn.,,4od
TO fully explain the workings of tbe
system IN his talks, and when anv
point remained in doubt he would
Try and make full explanation.
Here he recounted a nersoraT ~
perlence showing the results of tbe
reserve banks, and the general cor.
plant against the non-pavment ~
interest on the fund, of men,bare
OF the system. '"The returns he said
TO the bank are greater than the ac.
tual payment of interest, for the
strength acquired by the backing of
the reserve system Is Of far more
value than the interest on the
money"
The federal reserve banks stand
for a better system of banking. a
condition to which all states viii fin
ally arrive. The state guarantee of
bank deposits is good, but it makes
the good banker stand for the wrongs
of the poor one. But it is a stem
| forward for the whole action is tend