davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

when we must face the competition
Of cheap labor and the lower stand
ards of living Of the other peoples of
the world.
The ultimate solution will be found
only in a more fundamental reorgan-
iZation and rehabilitation of our
whole industrial structure, in which
we shall utilize the last ounce Of the
skill and intelligence of our more
limited and more expensive man
power and the ultimate measure of
the mighty natural resources that
God has so bountifully bestowed
upon us.
The one outstanding prodigal of
ali these natural resources is our
wasting water power.
While the Priority Board is issu-
ing embargoes on the movement Of
materials and products ordinarily
regarded as necessities, but Of Sec
ondary consequence in the face of
the pleadings of the mills and factor
les of the nation for fuel for their
daily power supply, the rivers Of the
United States are flowing thriftless-
ly and aimlessly from the mountains
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

shortage in the supply Of both our
man power and our mechanical
power.
Our man power has been reduced
by the demands for national de-
fence, and this temporary shortage
promises to become permanent with
the approaching complete cessation
Of immigration.
The consumption of oil is requir-
ing alarming drafts upon a meagre
reserve supply, and the production of
coal is choked at the source by un-
certainties of labor supply and in
adequate transportation facilities.
The result is rising prices for fuels,
increasing costs for power and an
ominously nearing prospect that the
supply Of power at any cost will be
inadequate TO care for our bare ne
cessities In this great international
emergency.
Drastic measures and individual
self-sacrifice maysuffice TO surmount
these difficulties if the period of the
war is brief; but they will not avail
if its duration is extended, nor will
they solve the problems after the war
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
SHALL POWER VITAL IN WAR AND PEACE BE WASlED FOEVEN
nNEuE thu tt Country Pour Int
LEGISLATION m Dhd

worldwide economic conflict which
will follow it.
Two or three decades ago the Use.
fulness of water powers was limited
TO industry upon the river bank,
First came the adaptation Of eler.
tricity as a power agent. Follow.
ing closely behind improvements !,
the generating machinery came new
efiiciencies in transmission eauip.
ment, until to-day hydro-electricity
is turning the wheels in factories
and workshops over a radius Of
more than 200 miles from the water
power generating it.
If Congress, in the enactment Of
constructive water power Legislation
had kept abreast of the engineer in
the improvements in the generation
and transmission Of hydro-electri,
power, millions Of additional horse.
powers would be available TO-DAY
the pressure for priority fuel ship.
ments would be substantially re.
duced and business generally would
face IFS responsibilities for winning
the war with an abundance rather
than shortage Of mechanical power.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

and are in use. Engineers estimate
that ultimately 35,OO0,0OO water
horsepower will be developed when
Il is possible to secure the necessary
Federal authority. Some OF. this re-
ouires the permission Of Congress
for the damming of navigaole
streams and some require pern's-
sion for the use of otherwise useless
public lands, which permission 70
department of the Federal Govern
ment is adequately authorized to
grant. This permission and au-
thority have been the subject OF
discussion in Congress for several
wears, but action upon them has
been repeatedly sacrificed on the al
tars of ill-founded theories and little
conflicting interests.
Bills are now pending in Congress
the passage of which would place the
requisite authority in the hands OF
the Departments of War and Inter
Tor, adequately protect the public in
terest and at the same time assure
the early development Of the water
powers--if not in time for use dur
ing the war, certainly in time for the
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
What viii
Happen TO Pricesp

II was further shown that the
general level OF the prices which
we pay for things is determined by
the amount or volume Of this bank
currency; and that therefore a very
rapid expansion Of bank loans in
variably causes a quick rise in
prices. And this is just what has
happened in the last two years.
The question now is, What is going
to happen In the next two years?
We saw that the banking currency
Of the country has been expanded
by nearly so per cent since the war
began and now stands at between
thirteen and fourteen billions.
What are the possibilities Of ex-
pansion under the new reserve sys-
tenn?
The twelve reserve banks now
have between them about a billion
and half Of gold. An appeal has
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
Summarizing
The Situation

Our whole industrial structure has
been reared in the expectation that
there would always be a constant
influx Of cheap labor from immigra-
ton, and that the supply Of steam
power would always be sufficient to
operate our mines and mills and
our factories and facilities for dis
tribution. In the crisis of a great
emergency we are suddenly con-
fronted by the fact that there Is
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

on. And Americans are not, asa
people, great savers. With a ma
tional income probably three or -four
times that of any other nation on
earth, it is very doubtful Il
Americas supply Of new capital
usually exceeded that Of England
alone, And flush times like these
are precisely the times when people
are least Of all In the mood for say.
ing. They want to spend-two bill
ions on automobiles this year, and
the like.
As adequate taxation and un-
aided thrift are both impossible to
the job there is to be recourse 10
The Easiest Way. And unfortu-
nately our banks have fallen in with
the scheme, because in the begin
ming it never looks very bad
So we have the slogan Borrow
and buy bonds" 1t has been est.
mated that on the first Liberty
Loan, for two billions, nearly or
quite half was bought on money
borrowed from the banks. u will
probably be equally true of the sec.
ond. And if the second loan ex.
ceeds four billions this will mean
bank expansion of perhaps two
billions. II they are criticised the
bankers reply that the advances on
the first loan have been paid Of
much more rapidly than any one
expected and that the larger part
was gone within three or four
months. And they will say that
practically it is the only way to get
the American people to save exten-
sively; that is, to incur a debt and
have to curtail their expenses to ex.
tinguish it.
The difficulty is that, as the Other
nations have found, each succeed
ing loan means a great and greater
expansion. Money borrowed from
the banks and advanced on the
bonds goes to the government aud
is promptly paid out in checks and
reappears az the deposits Of con.
tractors and merchantmen ger
orally; so that even if the loan il
self is paid off, the deposit and III.
expansion remain. Then the gen.
eral public pays the piper Of In
fated credit and high prices. Il
the operations of the war could be
met by actual savings from current
earnings, either by taxation or BY
genuine saving" as "The Econc'
MIST" of London, puts it. then by
every dollar so diverted other fields
of expenditure would be curtailed;
there would be no expansion, no
initiation and no high prices
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
Railroad
Requirements

The mountain states have more
than $4,000 miles of railroad tracks
that will sooner or later be electri-
fed. II is estimated that 10000
horsepower Is required to cleo
trify one hundred miles of track.
Nearly 100000 hydro electric
horsepower will be required to sup
Ply this coming demand. In the
Fast the rivers Of the Appalachians
are available to contribute substan-
tally TO the electrifcation of the
railroads along the Atlantic sea-
board.
The food production of the coun-
try has become a question Of in
creasing concern to all of us. Ger
many took account of stock nearly
fifty years ago. With 70 per cent
Of the population of the United
States and but 25 per cent Of the
area, Germany was producing in
1914 So per cent of all the food
which she consumed. She did this
by the use of eight times as much
fertilizer per acre as is used by the
farmers of the United States.
Nitrogen is one Of the essential
constituents Of this fertilizer. Al
ways heavy importer of nitrates
from Chile. this supply was early
supplemented by the construction Of
plants for the fxation Of nitrogen
from the air. More than r million
horsepower is devoted to this pur-
pose in the various countries Of Eu-
rope. The United States is without
single horsepower devoted TO this
purpose. Canada has large plant
which desired, but was denied, To-
cation in one of our own Southern
states.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
By Carl Snyder
author of american Railways &c
Investments," etc.

Il
Investments," etc.
TN an address at the American
Academy Of Political Science
~ in Philadelphia few days ago
a member of the Federal Reserve
Board made the statement that the
use of the new Federal Reserve sys-
TEN for imitation had in his judg-
ment already begun and that IF this
should continue it will convert the
Federal Reserve system into a great
engine for imitation"
We do not need to be told what
imitation means. For the first time
in more than sixty years we are in
the throes of it now, with a 100 per
cent rise in the cost Of living as a
consequence. Now we are officially
told that a still further imitation is
in sight and that the cost OF living
may go higher than ever.
There are very few people who
realize, very few economists, even,
what a tremendous "engine for in
flation" our new banking system
may become, and in the judgment
of many conservative bankers now
threatens to become; or what por-
tentious rise in prices this may fore
shadow.
Under the law creating the reserve
system it was provided that any
member bank could take proper
collateral to the central bank
and have it rediscounted, or
else by putting up certain per
cent in gold it could obtain
Federal Reserve notes. IL was felt
that by this means the danger that
any well managed bank would be
forced by a panicy run" TO sus-
pend would be ended; and also that
by creating these note issuing pow
ers the new banks would provide
for 4 kind of elastic currency"
which had been so long needed,
whereby a large issue of notes could
be put ont when money became very
tight, and then retired when the
situation eased off.
This was all very good, and when
it was organized the new system was
hailed as inaugurating a new era in
banking in the United States. But
in the creation of this new system
very large powers had to be given
10 the board Of control, and this
was a purely political board, in
whose selection or policies the actual
owners and managers of the banks
had absolutely no say whatever.
There we're many who had serious
doubts as to how the system might
work in times Of stress. In the
original act, however, many safe
guards were thrown about that
seemed sufficient to curb any ill-ad-
vised use Of power. II was only be-
cause Of these safeguards that suf-
fcient votes were enlisted to pass
the measure.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
No One to
Expound the Truth

As it is we have exactly the re.
verse, with the result that in all
probability the war will be costing
us from so to 100 per cent more a
year from to-day than it is now
just as it is now costing US just
twice as much as it would have cost
Il we had not been corrupted By
the billion Of new gold sent US BY
the Allies. And the amazing thing
is that there is not q single inhuer-
tial journal, not q Senator or mem
Der OF Congress, not a member OF
the Cabinet, not q member OF the
Federal Reserve Board, not ever
Mr.. Paul Warburg, TO rise up 70
utter one word of warning or 70 eS
plain why things are as they are
and why they will be rs they will be
il this policy Of folly and iniiret'
ton is pursued.
What "the people" that is 20 say
you and /, are coming to is a scale
of prices measured by 81 or -
wheat; 81 or $3.50 dozen for eggs,
and as much more for pound Oh
butter; 80 or so cent cotton and y
or so cent copper. 500 or $40 io'
pig iron. And he who foreteH
what clearly will be is as one sighlns
in the wilderness, for no one VII
pay any attention, and no one WIZ
care, until the riot Of extravaganza
OF six hours a day labor in the nilne'
and in the shops have done tne'
work, and the bubble shall hs''
been blown to the utmost aud n''
burst. and as a nation, very so0o
and very sorry, we shall SIT dow"
to ten or twenty years Of fa'l''e
prices and hard saving to make w
for the present orgy.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
Extent Of Our
Power Supply

Our man power has been depleted
by the withdrawal of 100000 Of
the youth Of the nation for military
service. and this may be only the be-
ginning. Our past supply from i'm
migration, amounting TO a net gain
u more than a million people In
1913, has dwindled 70 q net of less
than 100000 in 1916. and it Is likely
% be entirely cut off at the conclu-
sion Of the war. Our animal power
Is being rapidly replaced by auto
mobiles and motor trucks, and these
will demand increasing quantities Of
oil, the consumption of which was
recently exceeding production at
he rate Of 100000 barrels year.
Steam Is supplying our factories,
mines and rolling stock with more
han 100000 horsepower. 1t Is
requiring the mining and transpor-
.ation Of at least 50O,00O,00O tons of
Luminous coal per annum, and util-
.z.ng IN addition most of the oil not
required by automobiles and motor
trucks. The labor Of more than $780,
900 miners is required 10 get our coal
cut; $4,000 more men devote their
services % IL distribution. Nearly
one-third Of the railroad equipment
y the country Is devoted 20 It's trans.
rortstion. The production Of re-
cent three-week period was esti-
mated by the United States Geologi-
cal Survey 20 have been reduced 20
ger cent by freight car shortage at
The mines and AZ per cent by scar
city Of labor.
Electricity, the power agent pro-
duced by the present generation, 10
furnishing the remainder Of our pri-
nary power supply. About e,0oo,-
900 electric horsepower il developed
- steam plants, making total Of at
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
Reduced Reserve
Requirements

But after three or four years Of
the finest kind Of sailing weather,
the most widespread prosperity and
simply astonishing growth In the
banks themselves, all doubts seemed
dissipated, and last June, mainly at
the instance Of the Federal Reserve
Board itself. series Of amendments
were passed which did away with
most of the checks and safeguards
contained In the original act. What
tremendous powers the Reserve
Board now has, and how deeply the
use Of these may concern the daily
lives of every one Of us, I can best
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

SET IOrtn Dy SeVerai DrleI CoHlpdCl-
sons.
Under the old law the national
banks in the big cities, the reserve
banks, as they were known, were
required to keep a reserve of %
per cent against their deposits, and
this reserve had to be in gold or
lawful money. Under the new act,
as amended, this reserve has been
cut down one-half and it does not
have to be in money at all. 1t can
be, and largely is, nothing but a
credit OH the books of Federal Re-
serve bank. And just the same
with the country banks; where they
formerly were required to keep is
per cent in cash reserves, they now
need keep only Z per cent Of any
kind Of reserves, and this in turn is
likewise simply a book credit at a
Federal Reserve bank. These re-
serves, for big banks and little, are
simply against checkable deposits.
Against time deposits a book credit
reserve Of only 3 per cent is re-
quircd. And against these reserves,
deposited in the Federal Reserve
banks, the latter need keep an
actual gold reserve Of only 80 per
cent.
Put in plain terms, this means
that, very roughly, the banks belong
ing to the reserve system have the
power to expand their loans about
six times over what was possible
under the old system.
It is quite true that even after
three years Of the operations Of the
new system nothing like this ex-
pansion has taken place. But the
power is there. II is only the eau
ton of the bankers themselves
which has held down loans to their
present level, and as they become
accustomed to the new system IL is
only natural that they should tend
to make use of this power, because it
is the natural thing for a bank to
expand its loans as far as is con-
sistent with safety. The larger the
employment of a banks resources
the greater its earnings.
But the average man or woman
will say: What on earth has all this
got to do with me or my affairs?
This was precisely what | endeay-
ored to make clear in the article
published in The Tribune two weeks
ago, namely, that bank deposits are
largely created by bank loans, and
that it is with checks against such
deposits that the main business of
the country is done. This is the
real currency" with which six or
eight hundred millions OF exchanges
are effected. Only a small part is
done with actual money.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

been made by the President that all
the eligible banks of the country,
the state banks, trust companies,
etc, shall become members OF the
national system in order to mob
ilize" all the gold of the nation.
The quantity Of this gold is now
estimated, in a very rough way, at
something near three billions. If
the present movement to bring in
the outside banks is successful it is
readily conceivable that in another
year the Reserve Board may have
under its direct control from two
to two and a half billions of gold.
The actual possibilities of eXpan-
sion with this sum would be some
thing appalling.
Cover for
Sixty Billions
Remember that the Federal Re-
serve banks have only TO keep 80
per cent reserve against their de-
posts. and that the member banks
have only to keep an average which
for all the banks, city and country,
would amount to about 10 per cent
of reserve with the Federal banks.
This means that the actual gold re-
serve-the theoretical minimum
under the new amended acts only
about 31s per cent. Two billions
of gold in the Federal Reserve
vaults could be made to cover more
than sixty billions Of bank loans,
for the member banks alone.
The process is as simple as A B c.
Any member bank, as for example
the National City, of New York, or
the First National, Of Kankakee,
takes its customers paper to the
Federal Reserve bank of the district,
and if this is accepted gets a cor
responding credit with the reserve
bank. Every dollar Of this credit
so gained for the National City, of
New York, provides for about So
of credit TO the latter's customers;
for the First National, in Kankakee.
it is $l5, an average Of $40 for all
banks, big and little.
The only legal thing that can re-
strain or check this expansion is the
amount of gold in the Reserve
banks vaults; and If one Reserve
bank does not have sufficient
quantity, and others have, it is in
the power of the Federal Reserve
Board to commander this money if
it so pleases, and place it at the
disposal of any member bank.
Nor is this all. Under the origi
nal act, and still unrepealed. power
was given to the Federal Reserve
Board TO suspend the legal reserve
requirements and for the time being
make these what they pleased. In
stead Of an average gold reserve of
3 y per cent we might have only
| or 2 per cent.
1t is perfectly true that there il
no law compelling any bank to en-
gage in any expansion such as this;
and what is more, the chances are
that if any bank systematically pur-
sued such a policy it would now be
very seriously frowned upon by
other banks. Our bankers are a
very conservative lot of men, some
Of whom have weathered fierce
financial storms. But the great
bulk of them have not. 1t is a
very notable fact that more than
one-third Of the banks of the coun-
try have been organized within the
last ten years; with the fierce COM
petition among the banks the ten
dency is more and more to put
young and aggressive men in charge
who will get the business"
Furthermore. the banks must
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11

least 100000 horsepower depend
ing upon the utilization Of coal or
other fuels.
|. An additional 100000 electrical
horsepower is generated by the pow
e. produced by falling water. This
100000 horsepower Of hydro-elec-
tricity, requiring the supervision OF
only few thousand men for its pro
duction and delivery, making no de-
mands whatever upon overburdened
avenues of transportation, and con-
Stunning not a single ounce Of the
exhaustible natural resources of the
country, presents one Of the inexplic-
cable anomalies Of our industrial
and commercial structure, for this
amount represents not more than
10 per cent of the estimated maxi
mum Of the potential water horse
powers Of the United States; less
than 80 per cent Of the water pow
crs economically available, and less
than 80 per cent Of the amount
which would have been developed
and in service in our present
emergency had Congress been able
to agree on some policy which would
have permitted extensive hydro
electric development during the last
decade.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-11
The Future OF
Hydro Electricity

Electric locomotives, with a pull of
1900 horses, have doubled the speed
on the grades in winter and practi-
cally eliminated delays in schedule,
notwithstanding an increase in the
tonnage Of the freight trains from
100 to $500 tons. This tonnage
will be still further increased 10
3,000-ton trains twice as heavy IA
those formerly hauled by steam loco
motives. Electrifcation has released
nearly one-third Of the rolling stock
Of the road from the necessity Of
hauling coal for Its own consump-
ton, and it has made possible a sys-
tom Of regenerative braking Of trains
running down grade, which is not
only saving wear and tear Of equip
ment, but actually conserving sub
stantial increments of electrical en-
ergy. II has postponed the neces-
sity Of double tracking for more
than twenty years. Coal, oil and
man power have been conserved and
the operating efficiency Of the road
significantly increased, all by the
utilization Of water power that will
last as long as the continent itself
endures.
The coal mines are producing at
the rate Of 10 per cent more than
they did In 1916. and in 1915 there
was nearly as great an increase over
the production Of the wear before.