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Address* Thursday Morning, Maroh 26th Before New York Stock Exchange Institute. trwmmmrmm Mast of us have aft ana tirae er another been duly impressed with tha labels of higher education* Ha It a Yale manf a Harvard man, a Princeton man, an Oxford man, a Cambridge man. Ha has an H«A* or a *h.D. or aooia one af tha other appelatlons by wiiieh we designate tha graduates af our leading lastltu* tlans bath hare and abroad. Many times however, whan wa dispassionately appraise tha individual** bearing these labels, apart from these labels, wa are distressed and appalled at tha result. They art alas all too oftan smug, semi* Illiterate and worst and mast unforgivable of all, hopelessly dull both In their horizon and their perspective Likewise, masf of us have miss lata con* tact with men af wealth, men af means in relation ta the community and wa are prone to bow In reverance before tha parrot like phrase *moncy talks* and as* stssa and accept without question that such an individual csuet have a profound knowledge af money,btoklng and credit. It is even more discouraging here than in tha cultural realm. To discover that not always but too often such mn pes* sess no knowledge whatever either of the value af money or af the limits of mmj* Hence they roust always be living In a glass* house of illusion, having their minds and characters molded and warped by the seriousness by which they take their money and striving far ideals and aspirations which from the very foundation on which they are reared cannot help but crumble to duet and ashes In their hands when and If they are attained. How it la on account of the tragedy af this misapplication or misapprehension ef the differentiation between the labels and the products which we encounter so constantly in life, that I have chosen for my subject this morning, a financial education. The ward "to educate" comes from the latin edueere which means to lead out, te lead forth, to nourish, te build and it has always been a deep source ef regret te me that we constantly apeak of "an education19 as though It '2* were a completed process. Now nourishment in the physical realm can mvw be a completed process, jlbis side of the grave. And I think it it even more true of A manfs mind mods nourishment every bit as much s his body* If' How it 13 my purpose in a very sketchy and fragmentary way to paint a canvass, the man's mental stature, outlines of which you must fill in for yourselves, In which the scope of a finan~ cial education and the purpose of a financial education may be invisaged. At the outset, I recognise that the great majerlfy of you will con* slder what I have to say as philosophical drivelf idealistic nonsense and will shake your heads and go out sayingi "give me the dough, that's all 1 care about*. But it is en account of the Importance to the country at large, to the community which we serve and to the future prosperity, if any, of the world In which we live, that I continue to believe that the man who keeps his head in the clouds and at the same time, his feet on the ground, will receive a real measure of reward* Those of us in finance have one of the moat fascinating and interesting fields for research and reflection that is open to man and it would be a pity if having been forced, as many of us have, into this field merely because wa need money, we should fail to recognise this* So I should like to dismiss this morning tho two phases of finance im which the keystone of our future must be built. One, money; two, employment. Money is the product for which we strive; our Job is the facto 17 in which we hope to manufacture it* Are put in terns of practical economics, labor as a source of income nd labor a* a means of production. Ilany of us have read learned treatlsee on the gold standard and other related subjects which have poured forth from the presses of the entire world during the depression period which we hope has passed, and yet few of us have really grappled with the meaning of money. Money Is both a medium of exchange and a standard of value and its basic component is confidence and this confidence is no stronger than the civilisation upon which it is reared, and must of necessity be a part of its very fabric* Once having rec gnised this, the financial pages of the daily papers become of intense interest for in those pages the discerning student can discover the political and economic history of modem times and so ~3- to Illustrate this point, I should like to dlseuss the went which has become most prevalent In our comnanity la the last five years sad the country which Is most closely identified with that word. The word Is inflation, and the country Is Geraa$jr. Now* Inflation moans nothing more than m38m&* IffllWlT M t t > ft**MJM^ a * *>* i s thoroughly dlstrs-^ lag to perclwve that a nation which is loss than one hundred years old in Its modern foim shm&d have used material organisation to attain the spiritual desperation nm apmreat In the goveriflmt of Qemaoy* I would like to outHaohbriefly the history of the <*em&n Inspire* Following the thirty years war la 1848f the present Gteasan Itoolm eoaslsted of a disorganised body of heterogeneous principalities, possessing a multiplicity of eurreney standards and ao fomil contrail89d government iahatsoewert afcide froa the loosely drawn confederation known as the Bund* Because of the constant animosity of Austria and Prussia, this Bund was la a perpetual state of unrest# nevertheless those currencies gradually grouped themselves around the Prussian taler and the Austrian gulden* Some signs of Indus* trial organisation began to asferge* l a 1863 a Customs Union or (Zollvarein) was formed and in 1863 uniform eedes of eonnaretal law and b i l l s of exchange were established • In 1866 Austria withdrew fromthe conf dddwation and the North Gorman Confederation was formed. This North Geman Confederation was the direct anticedent to the founding of the German &ttdref January 18# 1871 • The first Important act of the new Hat&re was the establishment of a Central Bank* the Reiehsbaak and placing at Its head aoae other than the noted Chancellor himself, Bismarck, Those of you who are sincerely interested la knowing the true value of money should read carefully Walter 3&gehot*s *t*embard Street* f Dunbar on Banking aadCredlt* Dr# Burgess, the Reserve Banks la the Honey Market* and la the light of the principles enunciated therein, follow I t up with a careful study of Herbert feis*s Haaslngly provoeatlve book "Europe the to Ad* a Banker* 1870<»lfl4f and I think you will see something of what X mean by the soope of a financial education insofar as It affsits the study of m<n&y. It was an amaslag development which the Geiman Statstre had ac •4* oonmllshod* and i t s basis was almost entirely financial. During the period 1893*1900 the frossbanksn developed so rapidly that the depression ot 1900 was almost entirely localised and hardly felt at a l l in Geimany* By 1913 unlfesm balance sheets were furnished by these banks to the Reifchbank and a definite check on the financial pulse of Germany was available at the Palace each day* And now we come to the tragic end of Germany9* march to the sun* fflken at four o f clock In the afternoon of July 31st t 1914 Kaiser ^ilhelra XX stood on the balcony of the Palace in Berlin and addressed a teeming excited multitude of people* Ms words briefly, which I know by heart, because they struck me as being so dramatic and symbolic of the period which was to follow, "the hour of decision has struck* Geraany is surrounded on all sides by en* vious peoples* We ust show the world what It means to provoke Oexmaay.* /vnd so in a short spaoe of time the docdnant note of our civilisation became the call of the bugle nd the sound of marching feet* And I t i s fro© this period on that a real history of the war from our standpoint can be obtained more clearly fmm the financial pages of thi Hew York Times thai from the front pages of our leading mti odleals. Three Important decrees were Issued on August 4th f 1914 4nd passed almost unnotleed in the welter of propaganda* First, suspension of redemption of the Mark in gold} second, the a&aitt see of treasury issues as cover for the note issue; antl third f the establishment of war loan organisations* The discount rate of the Relchsbank was raised from 5 to &i and at that time the reserve In the bank In gold stood at one blllien f two hundred and fifty marks. Qetmany ms now swept with a wave of patriotism and the form In which this patriot!an was directed was mainly financial. Cltlsens wore urged on a l l hands to turn in their gold trinkets and other Jewels. The great rallying cry of Oetmacy beeame the slogan *geld I gave for iron" md In the smaslngly short space of seven months9s tine, the metallic reserve of the Reiehsbank was raised to two billion five Mildred million marks. It i s very doubt* ful If Geraany could have held out for * longer than six months or a yoar at most were i t not for this am&glng financial organisation which enabled It to finance the war almost entirely out of loans whereas the British Government up t i l l near the end of the war, s t i l l resorted to taxation. X do not desire to go Into this field further -5further than to r^oint out the gnat drama In the realm of finance which was unfolded. Suffice i t to atata that when the Cftinmn troops marehed iota Belgium that tha shop* keeper who mas imld ona ©waning in Belgliasi currency, found to his sorrow that ha was in tha hands of a rival goverafcent but that his currency was worthless* Shi trefps naadad money and ao the gold ind tha Sooiete Gene rale was confiscated and placed in a closed reserve account in tha Relehshank where i t served as cover for tfotgeld which became the circulating currency of the oeeupMd territories. At tha and of tha wart aver five billion Marks worth of this occupation currency was outstanding and I recommend to everyone here a careful t thoughtful reading of tha sections of the Treaty of Versailles shleh relate to the liquidation of this occupation currency. The further history of what led to the German inflation bears out more fully what I have said before, dospite the fact that the material resources of tferaany had been mortgaged to the h i l t , Its currency did not eempletely eollapss until the Ruhr Invasion and the period of passive rsslstenoe* * a a finally the confidence faetor which X have stressed before caused the tshole edifice to topple and the Mar t which in the early part of 1929 stood at 20100G marks to the dollar f rose to the astronomical figure of 4 t r i l l i o n , 800 billion marks to the dollar and German credit and finance had completely collapsed. X havenH time here to go Into the establishment of the Rentenmark and the remarkable financial leger de main practised by G^man financial aoweerera, test tftrcirxiw!ta^ It Is enough to say that German f i - nancial genius has not as yet disappeared* *£h® Qaitaan inflation was ©saatly cempar* able to what would have occurred had a nation of giants descended on New York ° i t y and growing playful had picked up the Hlapire State Building and hurled It at the Chrysler Building. Xt was wreckage # pure and ski pie* The implications of stmt I have said, social, political and economic, must be auoarent to m&ry&m vho sincerely reflects on them. Mow I turn to the concluding portion of this address, having discussed briefly the baslo faetors In the value of money* X mist of necessity turn to what Is more practical for each one of us, the study of our own Jobs* First of a l l , X should like to emphasise that an Intelligent appreciation of the Jobs which we are -6performing is an essential faotor in our own advancement and growth* Too fro* quently tho attitude of people ia not what services they can render to the community but how much they can get out of the community. They have no desire to give any- thing to the comri nlty. fhey hm$ no desire to build In the community* Their only desire is to be a leech ancl a parasite, getting as much as possible for as little as possible* Now, I am not a refomer. 1 have no hope of changing human nature but X still recognise that a oomunlty, like a chain, is no stronger than its weakest link and that while there may be periods such as the depression which we have gone through, when there Is legitimate reason for complaining about what our neighbors have*, when we have nothing, that still over a long period of time it Is our Job individually to so mold and f o m our lives that the community cannot do without usf that a tlmecannot develop when the coraraimity can dispense with our services* Now most of you have heard my own views on the basic problem of unem- ployment and know that I consider It to be inevitable, as I think any intelligent studpnt will consider it to be* Unemployment is unquestionably part of the price of competition. be engaged in* Part of the aste without which a system of competition could not There is therefore much justification for Socialistic criticism of the existing order on this ground* If the solution of the problem of unampley* ment means that all men willing and able to work should be guaranteed a Job in the field for which they are trained during the entire period of thalr life, at a specified minimum wage, there Is no solution of the problem of unemployment in sight* And I for one hope that no such solution would ever be embraced if It were available. It would mean that men would become even more so than they are today, human robots, humanraahhines,with no drive, initiative or Horizon* If however the solution of the problem of unemployment means that no mm willing and able to work should come to destitution anci degradation for want of work, 1 think that every right-thinking man and woman, regardless of how fortunate they may be as individuals, should be putting their shoulder to the wheel of bringing about this result* The demand for labor cannot be stereotyped, but the supply of labor can be made Infinitely more capable of following the demand and of m l ting for *»?*. the demand* Fluctuations la trade and industry are now met by the maintenance of huge stagnant reserves of labor la varying degrees of distress* There is no reason in the nature of things why these reserves should not be maintained as organ* lied reserves, raised beyond the power of distress* It is a policy of establishing a standard of life on a longer and a broader basis and in the individual field as in the collective field* It is a problem of maklngtthe facts of your particular case fit the assumptions of economic theory. It Is very easy to demonstrate mathematically at least that If the demand for labor were concentrated in one spot and the supply of labor was entirely fluidf there would always be tendency to equilibrium and unemployment would constantly be tending to diminish andddisMpear. Each one of us individually has a definite responsibility to himself to so far as possible determine and isolate the place where the demand for his services are the greatest and to make his movements as fluid as possible by studyf by going to night school| by constantly growing and developing as many bows to his string as he possibly can* Education in the final analysis la first a vision which corre* sponds with the aljofcabet* % mm cannot readf who does not know his A*B*G# You can lead a horse to water however* but you cannot make him drink and how many of us who know our A*B#G« ever do any serious reading* ever put to work the alphabet which we have mastered. The vision should constantly ?idenf buttiwavoiling down the road which is the most difficult phase of the nrocess of an education Is a longf hard, erlnding gnielling task and the one which Is aost difficult for us to accomplish* My plea this morning is not for a rehash of the old maxims which most of you have heard fro© childhood, such as "honesty is the b st policy11* •love your neighbors as yourself*1 *be thfctfty and save your momf w and balance your budget"by living within your means*1. I do not mean to deny or decry these adages but after the period which we have passed through I think all of us realise that while they «ay be true e<&lecttveiyt they may not be t*ue individually as witness the pmr thrifty individual who 1 M t his savings In a bank, laeh one of us must fit Into our own philosophy, the neeeasary apparatus to enable us to adapt ourselves Intelligently to the community which m serve and recognise that -8our om growth, however difficult it may be to see it, can he no larger than the gro>^th of the oormaunlty as a whole In relation to he amount of energy coraraenaunte with our ability which we put Into our labors. And so my friendsf In conclusion, having offered you the canvass, X urge you to fill In the details* There are many things which I have unquestionably said which may demonstrate myopia, nearsightedness on my own partt but the struggle of life is worth the candle and I should like to give you In conclusion a poem which has be n one of my favorites and urge that you refloat on it as I try to reflect on It In our Individual financial growth • Amen Say not the struggle nought avalletl* The labor in the wounds are vain The ansmy fainteth not nor falleth and as things wer^f so thay r amain. If hopes ware dupes, fears may be liars* It may be through yon smoke concealed* Your comrades chase *een now the foe, And but for youf you quitterf possess the field* For while the tired waves vainly breaking See® here m painful Inch to gain, Far back the mm clisibs tlow, how sloslyt But westward* hark* the day Is bright•