Show ROOSEVELT EVELT NOT Nil HELD TO BLAME Neither Is Any Particular Wall Wai WallStreet Street Group Responsible for Present Panic CENTRAL BANK IDEA WRONG WRON WRO JG SPEECH BY FORMER COMPTROLLER LER DAWES DAWE St Louis Nov 30 Charles G Dawe of ot Chicago of the cur currency cUrrency cUrrency rency was the guest pf pt honor tonight at a regular dinner of ot the St Louis Loui Commercial club and made a speed speech concerning The Present Financial Sit Situation Situation Its Causes and Lessons He declared that President Roosevelt Roosevel is not responsible for tor the recent finan financial financial cial stringency despite opinions held bj b critics of oC the president and asserted that neither could the responsibility for tor the monetary crisis be assigned tc to t tany any particular group of ot speculators Ir In Wall Wail street He said the stringency resulted from too great a dIsproportion between the cash In which debts an are redeemable and the debts themselves Mr Dawes Daw s said Jn In part President Blameless President Roosevelt is not responsible ble for tor the panic of 1907 1901 as his critics would have us believe bellee neither is any an another other particular group of ot speculators In ii Well street responsible for the expansion expansion sion slon of ot credits which led to the present presen crisis This Is no time to either praise or blame blama individually This cause 01 or 0 that cause may have hastened or may ma manot not have hastened the panic It is well wel for us In these times to consider the thi fundamental conditions and the fundamental funda fundamental fundamental mental causes and close our ears tc to t those who seek to lay Jay the responsibility upon Individuals The panic of or 1907 as a have all aU former panics In the United Unite States resulted from too great a disproportion disproportion disproportion portion between the cash In which debts are redeemable and the debts debt themselves Now that the liquidation of the cred credits credits credits its of ot the banks has proceeded to that thai point when the matter of ot the resumption resumption tion tl n of currency payments one cm of ot a few days when confidence In the th banking Institutions of ot our country has ha been again restored as I believe bellev belie ft t Is Isit Isit isIt it is amiss to speak of or the conditions which confront us Never In the history of or the country c have crises such as this we have re recently recently recently had In the financial circles ol or orthis this country been followed by b other than periods of ot retrenchment That this period will be shorter and less Jess drastic than heretofore Is the hope of ot us all an alland anand alland and It Is my own belief bellet nevertheless Into this period we are just entering The first step we are successfully pass passIng passIng Ing ng Treasury a Bulwark It might as well be recognized now nos that the Independent treasury system of ot f the United States has largely proved its Us commercial salvation In the present crisis rIsis We have heard so much loose talk during recent years about aboul the evils of Df the tho system and Its ill locking up the cash of ot the country when needed In commerce and busi bush business business bushness ness that we may as well recognize Its itt benefits and what we have escaped through it and it alone The difference between conditions with our Independent ent mt treasury and the position which we would eventually reach with Its abolition ion tion Is that the government would In Inthe Inthe the he latter case be hard up for cash as aswell well as the rest of ot us From the mo moment moment I ment nent of ot our putting the extra cash In treasury Into circulation it becomes the basis asis of at business and credits are built up ip above It under the ordinary opera operations operations ions of banking One Former Fault With this condition there would be a much nuch larger volume of credits In exis existence existence tence ence and therefore a much greater em business when the sec see secretary secretary of ot treasury would find it necessary necessary sary ary to call upon the banks for money for tor or governmental needs If any exception exception tion ion Is to be taken with the manage management management ment nent of ot the treasury during the past recent years it Is In the fact that be before tore fore ore Secretary administration ion tion too great an amount of ot the cash cashot ot f the government was allowed to go gonto Into nto general genera business In the shape of or public deposits where It became aba a ba basis sis of or credit and the amount of ot cash left lett Secretary Cortelyou on hand in inthe Inthe the he treasury which he has so well and ando of ot relief In Inthe Inthe so o ably used as a means the he present crisis was such a small amount Will Never Be Changed The Independent ind pendent ss system tern tem em will vili never be changed until we de depart part art from our present system of ot bank bankIng bankIng Ing ng The Independent treasury system systemS Is S absolutely necessary unless we have havea haveL a a L great central centra bank such as govern governments governments ments of Europe have where the ex extension extensIon tension of at bank credits in the central bank sank Is limited by the governments necessities In this country with Inde hide Independent Independent pendent banks where the th extension ex of bank credits Is determined by general business conditions and the Interest of ofha the ha banks It Is hi folly foUy to assume that I we e can do away with the independent treasury system and allow the t banks to handle andle all aU the cash of ot the government It t Is folly In my judgment for us to alk talk of ot Instituting a continental bank bankIng Ing ng rig system In the United States In InthIs his thIs republic of ours experience has shown hown that we could not keep the first or r second banks of the United States out Ut of or politics Nor would we be any anymore tore more fortunate with the third bank of at atthe he the United States If It we should attempt to o found one by legislation Greatest In the World The Tho present banking system of the United States needs no apology It ise is the he e greatest In the world The banking power lower ower of ot our country Is greater than that hat at of all continental Europe We Weave have lave ave this great system of separate and Independent banks and whether we wish ish It or not or whether theoretically It t Is best or not we must face tace as practical cal Ical men the utter Impossibilities of ot a arev rev at this stage of or our banking development to any type of banking fundamentally different It is Impracticable politically and from Tom om a business standpoint Mr Dawes then discussed the very foundation stone of banking credits the he e matter of ot cash reserve Reserve Law Faulty The reserve laws Jaws of or the national tanks banks of at the United States he said are an faulty J J The ThO Th statute should be mended amended so that but Instead of if r of ol the reserve of 15 i per J 10 d a I 1 41 L I I JOHN M LYON Patrolman who in the discharge of ol his duty killed a dangerous thug is fully vindicated by coroners jury cent required to be kept by b banks not reserve agents may ma consist of ot balances balance due from reserve res ne banks and the sec see section lion tion which authorizes banks In smaller reserve cities to keep of ot their theli lawful money reserve In cash with cen central central central reserve cities should be repealed As AB to t their is no question that we should have an added elas clas As to tc elasticity there is no question cannot however with our diversified d banking system safely devise a mo me ilium of bank asset currency which tan can an be used as an instrument of or profit in lorn al times without Injuring its Ill safety and stability In seeking the thc th fluidity of a circulating medium we 0 must never sacrifice its Us stability for that which aboe all an things Is Import Important important ant s the safety of the medium of or ex cx exchanges changes In terms of ot which our busi business bu business i ness U is I done Kind of f Currency Currency Needed An authorization of uncovered bank notes subject to a small tax and which the banks can use in normal norma times for the purpose of ot business profit will result In Increasing the dis disproportion disproportion disproportion proportion between cash and credits before such a crisis as that through which we are passing and therefore to the extent to which they have havo been is issued ISsued issued sued will interfere with the amount of ot credit notes which could be used In a time of or panic to lessen the severity of liquidation In other words we wo want I an emergency banknote circulation I authorized authorised In this country subject to toso toso toso so heavy a tax that it can only be used In times imes Ime of or emergency This kind of ofa ofa ofa a currency will help us out of or a panic panl when we are ire In one and not help helD us Into a panic when we are are out of nj n fl nIt flIt It cannot be used as a means of ot busi business business business ness profit and therefore as a basis of i credits speculative or otherwise Such Sucha Su h ha a currency subject to a very high tax can be bc made safe It is in Its very es essence essence sence temporary and it should be patent pate t to us all aU that It Is just as im important important important to stop ballooning In finance as it is to prevent too great rigidity In our circulation We c live have h ve a great country with great natural resources and Inherent financial strength and wealth Our banking system is admirably adapted to Its development A local independent ent eat banker can exercise a needed dis discretion discretion discretion in his loans where under a branch banking system the delegation of authority to ta tc be exercised at a die dis distance tance tane IP is of or necessity so circumscribed as to Interfere with the function Of the banks as they the now exist In the United d States When our country be becomes becomes comes older awl and our newer sections more fully tuny developed dev loped It may then be profitable for us to seek the greater economy and many conveniences inci mci incident Incident dent lent to a branch banking system But at present from both the practical and political standpoint tho the central bank and th branch banking systems are arc far tar away Redundancy in the Spring Within four months we shall have haven havea a n great redundancy of ot money In the United d States but what we call pros prosperity prosperIty prosperity Is activity In exchanges mac Inac Inactivity I ac In exchanges spells depression no matter what the money supply of or orthe the country may be or what Its na natural natural natural tural wealth The rho basis of ot business Is confidence and we may cherish no Il ii Illusions that the impairment of ot conil confidence dence iene den e which we witness at present and which compelled practically at once the suspension of ot currency pay payments pa ments on the part of ot the majority of ot the banks of the country will not have Its effect upon activity in our general This panic was not devel deve developed ped by fright on the part of ot the peo people people pie but by fear tear on the part Dart of ot the bankers that there was going to be fright on the he part of ot the people veople This apprehension led ed them to act almost simultaneously in an attempt to re readjust adjust their cash reserves In othe other words to make an attempt to get their cash ash reserves to the th spot from which they hey should never have been to o depart In so great a degree in the vaults of at the bank Dank where the liabilities ties ies were for which they were pledged and md not In the shape of ot a credit upon the he books bouks of ot a bank in some reserve city ity Liquidation Imperative That simple effort to get the actual cash reserves of ot this country distributed distributed in fact where they were distributed distributed only fin In theory theor developed that there here was such an extension of bank ank credits that this readjustment was Im Impossible possible withOut ut the suspension of J currency payments for a short time until there could be ha a liquidation of deposit balances against loans and an Importation of basic baste money from brad together with an Increase in national bank note circulation all iJ f which thich has decreased the disproportion between the aggregate deposit lee ies and actual cash on hand In the banks anks What the situation needs neets therefore from congress In mv nw m judg judgment ment neat is 1 first the change in the tho laws regulating cash reserves of national banks janks as outlined above and md pe he the authorizing of a heavy taxed bank abo about t emergency circulation |