| Show 1 BANKER fORGAN ON FINANCIAL ILLS tV J In Ills His Judgment Country Needs e Less Not Nol More Expansion I sion of Credit II F f I V THE LATE UNPLEASANTNESS M tI A J 1 rl anil U SI UI icI y of CUIr in cy 1 s t jt j b s toM NOL 0 d ir i t O of II t 1 10 1 nil I t tJ J j 14 2 ti i i v sv V York Jan 27 2 Speaking of ni ft bills bilic offered as lIa a 1 i or present financial trouble David Da nn president of ut the thu Notional City i t flank Bank of Chicago In hi a u toast Inn l to 10 tonight I night I l hl on Iho Ih question Cl VI nt at the annual banquet 01 ol I Ow kit t 0 bankers of the city of or New Nw York om cron I 1 Priding a n group of oC eight ll hl of oC n tim the N Nu NuJ w J State Hankers association at it the tho li 4 Waldorf doa do that In lilt his Jug Judg ment Ien the thc lest Is not more inor expansion ot of credit Mr tr l or op f 1 posed I strongly strong Mr Bryans proposition n Of or government guarantee of ot all u do of 1 the Ihl banks t i running thc thi lh i lit ct It th table HIli tI were J 1 1 I p Morgan and Comptroller nf ut i ti Currency Air Mr ruu Si o speech l cli much applause Ho Hu paid Mil IH I L Itc from fro Ilk tho t second ii city ci It ty of or o t Iho Ih t country to 10 the th first and appreciating it s thO fi problems UI ft net bunions ju which fall upon tin centers I fool that my ncy word must bo b ono one of l congratulation r I congratulate vou cU U f that the 1110 Is ic over yoi anil that you 1011 tire I rc ngul ii In III I n u IL L position Inn to t o order v rd r n 1 good 1 I with you II that tho good 0 oo 1 whip Finance had righted herself In It now lIo In hi o oth water and flint dial tin tho 01 hOl vessels h om Iller mid anti In ht d lly uro ro following closely In hi U hr r rw w ucH ij ko If f J r you it will I allow al Jo w me in L I ulc r n h ko to commend Hi en 1 Iho t hi c ablo n KOU It l hv In on ut or if tit NOW v J York Y ork during tho Into stress of or t w c So fo c In hi Chicago ara nrc nr rather proud rouil of or orI c I the way we W weathered storm I 1 think wo we came Clune through It bettor boLter limn thuin most cities But Hut for fuci courage to lo tot tI the t l on grit gilt to 10 stand U nIch n cut and willingness to yourselves In lii J OCI to holp others othor I take taku tul my I ha 11 off ott ar to t tho thu bankers of oC this city wes tern torn newspaper comparisons to tho contrary coot ary notwithstanding Storms Sl S rm teach loach und and test tos seaman seamanship ship nhIp l F t l that reason rel tn American tin till tn ought to be he the th host bes st t fn ru tin tl I ta world tl A banker may 11 pus pass a lifetime Jn in almost tiny 11 alt other olho civilized country j c without moro than moro more I lug nut t In 11 t tills this country Ills Jils soon IO develops him into Int a ft i r financier There T must mUsI ho something om wrong f with t him If it I after anor a n decade he ho hohas t has ha not not come COUO to fully the ilio i of ot or scattered ro cc 1 ot of temporary or 01 protracted hl liquidation 3 of or expanded or contracted credit I of or of chocks ot at rigid or elastic cur currency currency rency roney Moreover ho lw h In Is II likely 11 to tot t Invent an tin In original and Infallible plan designed to all ni our Ills Ils and that Is la one of oC the th ob obstacles 1 11 lu Ill the Ih way WIlY of ot reform beenu e eJi Ji Bl II become lOlle fome by ly tho wr among amons nu ong tho the bunkers bankers THE TiIE LATE LArE Tile rho late lale unpleasantness was Wis so Co o hort lort and sharp that Us Ils ts nature should be Ice apparent ent to every crI banker It I was tas i not hot due Ile to In U defects In our country We 4 were haIng no 1 ii more than thin the usual fall fail fO 11 scarcity carcIty of OC when tho lorm I broke l scarcity o ot cur jency lency was the result rosult of or the tho pans panI I I not Ha is s cause The he cause was vas u a 1 loss of fir public p conf which hUll had boon boen II c gathering force for months and IHl which reached tho crisis when hlen your our troubles s hero here In Now New York cam came to the th soy ui i face 1 o Tho defect In our banking i tYS ys j i tern fully tully to light t ht by hy this pan panl l 1 Ic s relates tu to the III reserves The Tile sy syi s i torn which permits to count coult a 0 n 1 credit with wih their city correspondent us IH part parI of ot reserves works 01 UI ll J t 1 rIght rl ht In ordinary weather or when J tho the Is to a n particular locality That locality may then thon draw upon Us ItS Is city cly credit arid and 1111 Und It ta Is avail al i ablo blo as a a the tile reserves In III Its Is own vault aUl tUt t But when whon the lt 0 ri la 11 big enough to tho 1110 country It U nut nal url happens j I In lit one on ot of the HI c lter and 1111 u a I general d u withdrawing of or balances sets l In v on wl cn catly l banks This may nitty ef I the Iho country quite proportions Iule assume for tho centers to meet At tho lu need iCCi thOl wInch the till renters most no nollie 0 to help them 1 rH rw meal local trouble H holl our y tj C Itt 11 tIP l II additional and r try their sharp rI lt Itil by J S tt t That H is what happened I and Now NO York H before 1111 ha 1104 has several happened 1 been drivell to cc UH nIt the tho only me Hll is 11 of Or ml 11 Chicago IVOr the tho In 1893 we W ll hl a them I em before great which Iw IL worlds fair to the tho I und and n bo be currency deal o fl Of II tul ot cIt in IU II subs s t tilO m isi ml lIllY whereas now we WI Tills titHe timo they aro and driven to the 1110 same Ild vore SOrI wor first experience we Lure are Ire II In n cutter aner our Cpr cUlled lo to think liLt did hOt iol scare care If they c a n good I the UIO people KO tO nl LAV tho law reserves r Tic way WIY rl works Is best hest understood by ly by an on 11 Illus IliUs Illustration Tho The law requires a it 0 national bank In ill Troy Tuy N Y to carry lf 16 lt per por II 1 COlt olt Only 6 G per cent how however ever over ne d bo ho In Its Is own vault Voul The Theother Theother he other othel S ti p per r cent celt may Hilly bo he l o with Its re ro reserve York City If IC the serve agent In Now NC 1 deposits loro of ot tho tile Troy froy bank bauck 1111 are aro It keeps kIels It eps at tt II homo hOlo and nUil In ill hiow Now ow York Yolk In Now New York however Is 18 not money It 1 Is merely n cc credit on tho thu banks banis or ot tho Now New York bank against which n tS 1 reserve allow allowing ing lug for legal deductions of ot not more ort than Is kept by the tue Now New No York bank aIK When hen tho Troy ry bank becom becoming becomIng ing alarmed deoms It prudent to 0 have havea IL a larger proportion L of ot Its reserve at ul ulL homo home It mo IV 1 io I respondent I sp to send U it I nay sety That Chat unreasonable does doc dO f not eol an banker Only out to 10 tho thu Troy 2000 of ot POO Hut hIlt when tile tho Troy bank balk withdraws It withdraws alt all tho the reserve there thore Is II Is II the world against It Its deposits except what Is In Its I own Is ts left sate safe ac and tile tho to Now York hank bank wRit with lh it a credit on Its Is books of ot S OOOO against which no reserve now eI ls When Whon that transaction Is multiplied by b thousands and ho general It U I simply an tOt 01 Impossibility I bi t for or the tho Now York tank bunk to 11 tad so 51 tt II restricts spa specie spate cie te payments for tor a I while For this reason I favor tavor that part of o Senator bill which Increased the tho pro proportion portion ot reserves to bo ho retained at al homo by b the tho country buck bank from 6 G to 10 pOI per LOUt cent Hut But that Is 19 the tho only pro pm provision lr vision of or his bill bi which I favor If II any al of ot his emergency cut cur currency CUI rency roncy were over Issued hearing bearing a 6 GP pet pel H cent tax X It would loUid bo be the signal tor for the tiLe country banks to begin withdrawing their balances and Instead of averting a 0 n panic anle It would woul a a panic certain If It our currency could bo be b ma u mot mor mote responsive to tho needs of commerce it sections and an at lt various sea sen seasons sons Coils ons wo would woud bo be In Ia h less danger o ot of panic This In lit II my toy opinion can COIL be ac IC only ony In iii Injecting mote moio maIo ot or ortho tho the of if bank credit Into our bank banknote note n te currency Elasticity t means con contraction cn contraction traction after expansion BO no that thal It I may truLy expand again ngn This can only ani be ho ob obtained 01 tamed by II making tho tito currency fairly profitable to the Issuing banks so 0 that thai there thero wilt will Wi bo ho competition among theta them to keep kecI koe their own notes out anti and to i puah uh their In tot Tor redemption rC Ample Amplo redemption r must bt itS 1 provided Id for that purpose In that way Wt only will w there never be moro more nor nOlle less leas t currency lu Iii tho thu channels of o commence tItan than I b requited I havo always been lieen doubtful whether proper redemption facilities tIll tan be ba provided for tor our na ni banking system containing oval Individual banks and Ild my lY doubts doubt havo I 0 not been lessened b i by reading Con Congressman gressman Fowlers Fowler latest bill bi The rie rl proposals pr of at tho Iho commission ap up pointed d by hy the tho American IP a ace come COIO nearer a solution of o the tho problem t lA Ii tItan than thOI any uny other othor and it tid ought t to tl I o PANACEA A Another panacea hUB has been proposed by Mr 1 tt Bryan anil like Ill his bin frau Croo sliver proposition tt IL bids I fall fair alt to many even Olen of the elect namely name government O t guarantee of ut all i I of I t the national I banks This folly tol lIt can fl be III ln In fully us lS attractive Il att cot col cla ors cIrs or as at S any ci flY of ot the tho old financial iii fallacies ml and 1111 I am somewhat nl by tt It will wi Iii I lw b i charged I with lh I lii f In I crest In Iii 11 opposing It I I t J r am ci in utterly II amazed 11 Ull to 10 hind 1111 Mr Ir Fowler sup pulling It I I have hlo been neou many nUllY bunk halll I f in ht the tito st 30 past lcd years hut but hit till all 11 that I r hMo havo over havo hail 1101 ono ou and a cuti the t 1111 II samo no cause namely I Ihu I Ii u man t making lul loans inCus directly or 01 ln In to 10 Itself I 1 In CU I bankers bu ti malvo ku heavy hI ht vy losses by I Int t tI loans hoot is und u 1151 I heir positions It t on oil 01 account hut bitt hit I never Known wu a I uk lo 10 I o fall all al or I r get gru If Into Inlo I a it I fall rul itt Il Ing hlo ho lit erl hUll hail no personal Its I I iii I In hi I it iiA t lie loans Thu he hll 10 tin I u t of ot Its I h ha ii it 5 I II tt eol ol 01 as Its iK he hues 11 I hI moui y of ut lt I ito ho pour and 1111 loaning It I to iii II the 1111 IH Is I Its tn claim on 11 his hl Integrity und and 1111 ron 1011 Jill il If It nil all tire MIC 11 to 10 he be guLl ru it I why V II not Ii Ut ii sk them I In II I i t t ty try ly ing tu tl t make seeing no in Iii JI will 11 he lie hI Ito loei Dopol 10 I OIl 11 mil money They me Iro itt e largely by ly of lit lt m It In Itt my lily Y j we ctt ii I IUM 11 cx of lt If If lit t In II I I I this I it Is ii I t not IO I rind 1111 LI itil It I to tic nu tnt I t If I t there here t IH Is II cute onu thing I thai thul I t would muKe nia ule kit bunking Icu uk lug moro flora 1010 i Out I utile I c both loth t Lit us and gut ii to 10 I I n It 1 lOs rol never I i il Mini 11 UI tI nut I y n ti crush clah 1111 rs I him lilt Ii any liny ulY un vic W h vt hud had lull that thing In hi i I glut of ot Ill C ii an tuii neatly i tea ny I billy I Iuni tills uni 11 told lull tot foi at nl I 1 cit the lice nn ono 1110 pin fIll pl po d by b Ilio II I I l bullion Itu It Wilt will wi lieNs 01 or hut thul noun lIn I will riI PUI pa until un LII In 01 of If Ic lcd tra tutu men l hll n up III p Iitti by II h lilt tha Ihl I t hub ban hU 1 lath hi hiI the Ih I ite IY anil auth Ild h lids report reported ed vII u tt bill billIn hi In 11 I it let li i 1 rOil 11 nay II that tu tic pie little dute In III II the thu Et IK is I I 1111 lit ti belli 1101 year them I hi IE wi v I I I of ur e bo be 11 Iii 1111 we S 11 tt roll Is II 1 what lt ici lit r lint ot I alt 11 u un tu to Ii have In the tit Vb I loue For Voi 1 01 reH i n wo wit do hi not hut expert In II IMS I ON will wil equal thai Ihal of lt 1007 and It I Is IH UH Ow iK well 10 hI to tA HI tot for roO ci a Ii I b Hut I tIlt glut I InCh Ihl t ii I lu Is I n u grist III III lY and II I iii UH I I I s ii t I Lila I g it v lit tU II I tot lie liei I i 1 |
