The Washington herald., 1918-10-30
SUGGEST UNITY
IN POWER
N. Y. Fiinanciers Would
Like War Leadership. Ac-
cording to Holland.


gins upon other loans. wiiI result
In restraining the prevailing tend
ency to speculation, remains to be
disclosed. It should. 1t is believed.
exert some influence of that kind,
Evidently the committee is not cer-
tain that this win cause the full ef-
feet desired. for the intimation is
strongly made that unless this ac-
tion proves suficient, then a further
increase in mEagins may be recon-
mended
The reUark was made this morn
ing by rne who in the past was Of
great Influence in the financial dis
trtct and of wide experience in
time Of speculation, that it seemed
TO lin that the Bankers Money
Cr mmittee may have been over ap-
rrehensive and that the danger as
sociated with heavy speculation and
the consequent increase in bank
foans may not be so great as the
committee seems to think il Is. Fur
thermore this authority stated that
IL there could be a unifcation or
concentration of the banking pow
srs OF New York City in the hands
of one man. and he named George F.
Baker. then there would be perfect
confidence that the banking situa-
tion 81 far as expansion OF loans is
concerned. would be well handled.
II there has been unihcstion OF
power in a single supreme military
commander. and IL there has been
ratification and concentration OF
power in the hands of Mr.. Baruch.
Mr.. Hoover. Mr.. Ryan and others
with highly gratifying results, why
. ~ nrFh ~ n ~
nit to one Individual. who is pre-
eminent as a wise. conservative and
yet courageous banker. authority
for the handling OF such PROPOSE
tions as the Bankers Money Com
mittee was for several days OF last
week considering?
Mr.. Baker was spoken OF as pre-
eminently indicated as the one man
competent for surh nTthoritv and
power. because IN the plsS he Ie-
vealed great ability as we'll as great
wisdom i'm the handling of emergen-
eies created by over speculation or
by money market decentralization.
In the panic days Of 1907 Mr. Baker
led the procession to the Clearing.
House Association. whose Durrose ii
was to take out Clearinghouse cer-
tificates. The bank OF which ne was
then president took out a large block
Of clearinghouse certificates. Not
one OF these was ever used. for the
bank so managed that il was un-
necessary for il to seek aid OF this
kind. Mr.. Baker did this as an exam
pie. He knew that some Of the banks
of New York hesitated about taking
out certificates, fearing that action
Of that kind might tend to impair
the credit OF the banks. But il the
First National Bank was willing to
take out certificates, then there was
no reason why other banks should
not follow that example. The ex-
ample was followed and the clearing
house certificates went far toward re-
neving the situati ton.
Mr.. Baker and Mr.. Morgan,
Again, at time of money panic
when the president of the Stock Ex-
change was fearful lest the demoralf-
nation become so great that IL might
be necessary to close the doors of rne
Stock Exchange, Mr.. Morgan, having
been informed OF the danger, after
brief consultation with Mr., Baker.
instructed the president OF the ex-
change to go back and to announce
from his place in the exchange that
100000 would, in the 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 for the
purpose of checking panics. restrict
ing over speculation, or warding of
dangers in the past forty years, in
which Mr. Baker, and, until his
death. ]. Pierpont Morgan. were not
the leaders. Mr.. Baker understan nds
as well as any banker, and probably
better than many OF them. what are
the conditions which lead to specuIa-
tlon and what should be the meas
ures taken to bring over speculation
to an end. His understanding Of the
credit resources of the United States
is profound. He knows from past
experiences that 1t is almost irnpos-
siole TO prevent speculation when the
conditions are ripe for it Further
more, he is convinced that specula-
tive activities IN securities are un-
doubtedly OF value. providing they do
not go too far. and he knows how to
prevent them from going too far.
The Conservation of Credit.
The Bankers Money Committee.
through Governor Strong, reports
that il is convinced that there must
credit, since within few months the
people will be asked to subscribe to
another issue OF liberty bonds. and
very likely when the harvests of
1919 are ended will again be offered a
new issue OF liberty bonds. But the
financing OF the Fourth Liberty Loan
does not seem seriously to have en-
croached upon American banking
credit.
When the speculative impulse be-
comes very strong IL is almost i'm
possible to restrain 1t. The banks,
Of course, may limit il either by in
creasing rates OF interest upon call
loans or by demanding very large
margins upon the loans. Neverths-
less. in times OF great speculative ac-
tivity, restrictive action has not al
ways been found sufficient to prevent
speculation
In civil war days, at a time, too,
when the government was seeking to
market large issues Of bonds, and
when II was said to be necessary
that credit resources be conserved.
nevertheless the people insisted upon
speculating. There occurred at that
time the extensive eo-called Morse
speculation, which could not be
STAYED. notwithstanding vigorous af-
forts to check It. nevertheless the
movement proceeded. and when
credit could not be obtained cash
was utilized as the medium OF specu-
lation.
II may be possible greatly to limit
this present speculative impulse, and
vet the reasons for the impulse are
80 strong and money conditions in