The Birmingham age-herald., 1918-10-30
MARKED TENDENCY
 TO SPECULATION
By HOLLAND

New York, October 29.-(Special) Whether or not the action of the bank
 CTS money committee of New York In
 requesting the banks to increase the
 margin required from brokers to 30 per cent on all regular loans, with an in- crease in margins upon other loans, will result in restraining the prevailing ten- dency to speculation, remains to be dis closed. It should, 1t is believed, exert some influence of that kind. Evidently the committee is not certain that this will cause the full effect desired, for the intimation is strongly made that un- less this action proves sufficient, then a further increase in margins may be recommended.
 The remark was made this morning by one who in the past was of great in- fluence in the financial district and of wide experience in times of speculation. | that it seemed to him that the bankers ! money committee may have been over apprehensive and that tho danger as- | sociated with heavy speculation and the consequent increase in bank loans may not be so great as the committee seems l to think 1t Is. Furthermore this author \ ity stated that if there could be a unifi- cation of the banking powers of New York city in the hands of one man, and he named George +. Baker, then there would be perfect confidence that the banking situation so far as expansion of 1 loans is concerned would be well han l dled. If there has been unification of | power in single supreme military com mander, and if there has been unifica- tion and concentration of power in the ! hands of MT. Baruch, MT. Hoover, Mir Ryan and others with highly gratifying | results, why might it not be worth while I to commit to one individual, who Is pre-
 eminent as a wise, conservative and yet courageous banker. authority for the l handling of such propositions as the bankers money committee was for sew
 eral days Of last week considering? MT. Baker was spoken of as pre-emi- nently indicated as the one man c0mpe-
 tent for such authority and power, be- cause in the past he revealed great abil- ity as wellaas great wisdom In the hand ling of emergencies created by over speculation or by money market demor- alizatiOn.
 In the panic days of 1907 Mir. Baker led the procession to the Clearing House as- sociation, whose purpose it was to take out clearing house certificates. The bank of which he was then president took out a. large block of clearing house certifi-
 cates. Not one of these was ever used,
 for the bank so managed that 1t was unnecessary for it to sock aid of this
 kind. Mr. Baker did this as an exam pie. He knew that some of the banks of New York hesitatod about taking out certificates, fearing that action of that
 kind might tend to impair the credit of
 the banks. But if the First National bank was willing to take out certificates, then there was no reason why other banks should not follow that example. The example was followed and the clear ing house certificates went far toward relieving the situation.
 MIR. BAKER AND MIR. MORGAN Again at a time of money panic, when the president of the Stock Exchange was
 fearful lest the demoralization become so
 great that it might be necessary to close
 the doors of the Stock Exchange, MT.
 Morgan, having been informed of the danger, after brief consultation with MT.
 Baker, instructed the president Of the
 exchange to go back and to announce
 from his place in the exchange that $2o,- 000,000 would, in tho course of an hour or
 so, be placed on the market. This was done, and the money panic was brought speedily to an end. There probably has not been one of the movements originated
 
 stricting overspeculation or warding off dangers in the past forty years, in which
 MT. Baker and, until his death. J. Pier pont Morgan, were not the leaders. MT.
 Baker understands as well as any bank
 CT and probably better than many of
 them. what are the conditions which lead
 to speculation and what should be the measures taken to bring overspeculatlon
 to an end. His understanding of the credit resources of the United States is profound. He knows from past experi-
 ences that it is almost impossible to pre-
 vent speculation when the conditions are
 ripe for it. Furthermore, he is convinced that speculative activities in securities are undoubtedly of value, providing they do not go tooo far, and he knows how
 to prevent them from going too far.
 THE CONSERVATION CREDIT
 The bankers money committee. through Governor Strong, reports that it Is con-
 vinced that there must be wise conserva- tion of American credit, since within a
 few months the people will be asked to subscribe to another issue of Liber-y
 vests of 1919 are ended. will again be But the financing of the Fourth Liberty Loan does not seem seriously to have
 intrenched upon American banking credit.
 When the speculative impulse becomes very strong, it is almost impossible to restrain it. The banks. of course, may limit it either by increasing rates of in- terest upons call loans or by demanding