Evening star., 1933-06-04
CONTINUED From First Page.)

central bank or with banking at aIl.
Opposite me sat a big industrialist,
who is also on the board Of the biggest
of Britains commercial banks. This
bank is headed by former political
chieftain who strongly opposed the
movement back to gold in 1925 and who
for years has been a virulent critic OF
the Bank of England policy and gives
vent to his opinions in his bank
monthly review.
It seemed to me a waste of a good
dinner to have two such men making
small talk and. by way of a provoca-
tive remark about newspaper criticism
of central bank credit policy and a 5
per cent lending rate by the CONNER
cial banks. I put these two in contact
Once launched on banking, they en-
gagged in rapier play which had a GER
tain touch of grimness about it, despite
the social occasion.
What passed does not matter, but If
you have ever heard a commercial
bank man talk about a central bank
man, or vice versa, you can guess at
the nature of the preliminary ex-
changes
The point, however, is that the talk
veered around to constructive things.
The American in the Bank of England
had been much struck by what the
British have accepted as traditional
namely, that except for a quarterly
formal luncheon at the central bank,
there was absolutely no contact between
the central bank and the great clearing
house; and he thought that it would
greatly strengthen British finance if
some liaison were arranged. No sooner
had the ladies arisen than those two
were together, getting down to cases.
This is only one small instance of a
seed dropped by Sprague in British
banking soil, subsequently to bear useful
fruit. Just how useful Sprague's Amer
ican contacts and profound knowledge
of American economic conditions and
intimate acquaintance with the work.
ing of the Federal Reserve System were
at Britain's central bank the world
will not know until the secret banking
history of this phase comes to be writ
ten (if it ever Isl.
Knows Europe Well.
But it is certain that what Sprague
brought to Britain's central bank from
his native United States he will take
in even larger measure into his new
field of activities as executive assistant
to the American Secretary of the
Treasury and a member of the RCose-
welt brain trust. He has, after all, been
on the inside of British national finance
during a phase of historic change.
He was there when Britain went off
gold, and he saw what happened as a
result. He Is personally acquainted
with the central bank chiefs of every
important state.
He knows Europe well. In the Sum-
mer of 1881 he was invited, with three
other bankers. by the German govern
ment to advise during the banking
crisis in that country. and he, helped
greatly to pull the German banking
system through that crisis.
And there is no angle Of the gold
and monetary policy problem which he
has not studied and discussed with
leaders of the pro and anti schools.
His own lucid mind is entirely un-
prejudiced 1t is essentially the scien-
tific mind, which sees facts, recognizes
their inevitable consequences or prob
able implications and arrives at its
conclusions by a process of close reason
ing based on facts, figures and per-
sonal knowledge of the human equa-
tions involved.
Any one who thinks that this is a
man who lives purely an academic life
and derives his knowledge from books
has another guess coming. He is
ations, and his Judgment has seldom
proved wrong. He sees deeply into
conditions and is not for moment
bamboozled by surface phenomena.
I had talk with him in May last
wear. That was time when optimism
was showing its head again and the
stock market was working up to
boomlet.
/ asked him If he thought the situa-
ton in America would improve. He
looked at me with those nearly pnnd
eyes and said decisively: mo; l tnlnK
they will get worse"
He spoke detachedly about general
banking and the economic situation,
dwelt for spell on the problem OF tne
war debts and the British attitude
thereto. and said what he thought
should be done.
Then he went on to forecast tnat
run on the American banks which IN
fact came 10 months later.
He sounded like a pessimist, but ms
Is not a pessinistic nature. In TACT, ne
Is a scientist of banking and economies
and the human nature phenomena re-
lating thereto are his chosen province
Within this province his mind WORKS
so detachedly and coldly that when
first had a close talk with MIN ne gave
me something of shock.
I had gone down to the panK e 70 sec
him. They had just flnlsneo pulinis
down the old building and putting up
the great new modern block around
the central courtyard, with its treas
lIred trees and ancient shaven tur1'
Scarlet coated attendants stood on
guard at the outer gate and dlrecteo
me to the inner sanctum. Ana IneIe
at a rather small desk in a corner was
the white-haired American economist
a sign of the recognition in the BANK
of England of the Importance OF the
American angle and factor, and OF the
new interdependence Of high hnance.
Favors Bold Action.
We talked of the crisis and the out
look. and I pressed for an ultimate con-
clusion. It was then that DR.. Sprague
administered his shock.
We had been talking of this, that and
the other major problems. He salo
that unless certain major and specihc
problems were solved, and solved soon,
bankers and constructive statesmen ana
leaders generally would be prevented
from coming to grips with the larger
tasks of reconstruction which await on
the other side, and our show Is nm
ished"
DO you mean that capitalism is fin
ished?" 1 asked, still baking bit at
accepting the full implication of his
terse words.
Just that" he said "I have not had
any practical experience Of Bolshevism
but l have seen it in operation, and as
between the two, Communism and cap
italism, I, myself, prefer capitalism.
But capitalism cannot survive un-
less we can get together, tackle ano
solve these major problems which are
breaking it down, which have already
partially broken it down. I should say
that, failing solutions, the final break.
down will come two years from now