Show KANSAS CITY NEXT IN LINE Aldrich Attends Dinner Given by Clearing House Association Association Association tion and Then Makes Speech Upon the Currency Question HAS NO PET SCHEME OF REFORM TO PROPOSE Nevertheless the Rhode Island I Statesman Tells Audience of the Experience of the Mone Monetary Monet try tary t ry Commission Commissi n in Europe FOREIGN METHOD IS SAFE I Kansas City Nov 9 Reiterating his declaration that neither he nor the monetary commission of which he is head had any pet scheme of financial reform Senator Aldrich tonight in this city dwelt at some length l upon some of ot the advantages of the European banking systems over the tile system in inthe Inthe the he United States He spoke after a ainner inner dinner given by tile the Clearing House Housea association a at the Baltimore hotel Senator William Warner of cf Missouri introduced the Rhode Island senator Mr Air Aldrich found in the reserve system system tem tern the tile most striking characteristic of Euro European ean banks he h said He said that central banks of England Englan France and Germany the Bank of England and the Bank of France and the hold all the resources of all the tho banks of their respective coun countries countries countries tries He pointed out that there is no legal egal requirement making it necessary for foreign banks to keep in their vaults vault so large a percentage of depos deposits its as us is necessary In the United States and said sald that the subordinate banks regard money In the institution Institution institution tion just ju t as available for their reserve purposes as if it were In their own vaults Reserve In Foreign Banks He added that foreign banks do not hold bold as till money a sum greater than 3 a i or 4 per cent of their liabilities liabilities ties while in the United States StateR the average is 10 per cent The London banks however have either in their own vaults or in the Bank of ot Eng England England England land 14 II or 15 per cent of their de deposits deposits deposits posits In addition these banks loan large sums to discount houses subject to call on short notice which they re regard regard regard gard as another source of reserve Another item of still f tIlI greater importance importance importance tance he said Is commercial paper hold held by b secondary banks This paper is receivable at the tile Bank of at England and it is considered by b bankers far the most important portion of their reserves What is s true In En largely hd t carmany In this way the tho banks a r t the central bank which is in Itself a re ro reserve servo serve and they thus are enabled to loan from four to ten times the amount that they could loan under oth other other othor er or conditions European Laws Mr Aldrich dwelt upon the tho fact that European laws make no requirement I either as to the amount of reserve I or their publicity The percentage Is left to the wisdom of ot bankers He said that the tho Credit the greatest private banking institution in inthe Inthe inthe the world kept practically no money mone moneIn in its vaults depending entirely upon the tho Bank of France in case of large largo demands upon it But on the oUter other hand lland reserves of ot the central bank amount to about 75 per cent of Its lia ha not only rendering It strong but making malting It a bul bulwark bulwark bulwark wark for other French banks Asking Askin himself how the great central banks protected themselves in times 01 of stress Mr Aldrich replied They advance discount rates as they did the tile other day da For what To at tract gold from other countries which has 1105 the effect of building up their re reserves reserves reserves serves This process pro ss Is always success fIll ful In 1907 1007 the Bank of or England ad advanced advanced advanced the rate to 7 per cent and that step brought gold from coun countries countries countries tries I asked Mr fr Campbell then gov goy governor governor of ot the bank what he would have done If it he had not secured the gold He replied We Ve would have put Dut the rate up Continued on Page 2 I KANSAS CITY IN LINE Continued tram Page 1 to 10 per cent and that would have brought gold Sold out of the earth Liberal Credits What else do they do They extend credits liberally to everyone everone who Is sol aol solvent solvent vent and who has a right to borrow In Instead Instead Instead stead of shutting their doors and stop stopping stopping stopping ping the extension of credits and refusing to give credits to their customers they do these two things They protect their own reserves le and they extend credit lib liberally liberally liberally to everyone who deserves it and who wants it It That is 18 the whole secret of the method meth method method od by which these great banks batiks take care of and regulate affairs of those great countries in case of probable trouble Contrasting this system with the rigid methods of the United States Senator Aldrich said saidI I think this statement will afford sufficient suggestion to you to show that we certainly ought to consider very carefully care carefully fully tully the question whether our banking system in that respect should not be re reconstructed reconstructed reconstructed constructed I have no doubt myself that the opinion opinIon opinIon ion which U Ii everywhere expressed In Europe that our system te is barbarous Is correct It certainly Is against the ex experience experience I of modern banking everywhere I else elie I It was evident to all that Senator Aid Ald Aidrich Aldrich AIdrich rich found in the European reserve system system tem tern features which he believes superior to ours oun He spoke especially of the con confidence confidence confidence engendered by the foreign method seethed |