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3
FOR RELEASE

2

SATURDAY.

JANUARY 2 1 ,

1923,

TH fi

^TrmTA
AL

'
C O N T R O L L E R O F THE CURRENCY, HON, D . R . CRXSSl'NGEP, BEFORE- THE
REPUBLICAN CLUB, W m YORK, N . Y . , SATURDAY, JANUARY 21,
CJ-c..,; A

SU3JECT:

FOREIGN TRADE RELATIONS - The Debts of our A l l i e s
and the S t a b i l i s a t i o n of

Chairman and

Gentlemen:

International

Exchange,

X ^ ' U ^ S E R V v ^ ^

I remember one evening r e c e n t l y hearing *Hr. B a l f o u r , who has had
^ r h a p g a g l o n e , continuous and d i s t i n g u i s h e d a public service as any man
world, observe almost p a t h e t i c a l l y t h a t , looking 1 baclc over h i s
"Xp^rioncos in t h i s ^ o r l d , he was net able to r e c a l l anything that happened
In1
*
w e rea.1m of human a f f a i r s , p a r t i c u l a r l y important or i n t e r e s t i n g , pi-ior
t0
1914.
I d o n ' t need to elaborate that observation i n order to make i t s
^ f l i f i c a n c e appar3nt to a l l of you.
Never i n a l l i t s h i s t o r y , h a s the
^orld. recognized
tremendous s i g n i f i c a n c e o f contemporaneous events
0
anything l i k e the extent that i t has done i n the l a s t seven and a
3-lf years.
I t i s almost f a i r to say that there was h a r d l y a man or
^ ^an i n the world, who knew how to read and w r i t e , who did not recog89 by the 4th day of August, 1 9 1 4 , that the human community had come
the end of an epoch, arid had entered upon an e r a , a b s o l u t e l,y
y new to
it
> whose s i g n i f i c a n c e and u l t i m a t e eevelopments none might dare f o r e c a s t ,
that we were launched suddenly, u n e x p e c t e d l y , i r r e v o c a b l y upon an
of troubled and tremendous e v e n t s .
knew net where i t s t i d e s and
Cur
r e n t s and winds mieht carry u s .
^e could o n ] y v a g u e l y eruess a t what
stiny might have i n store l o r uuss..
^e were p r i v i l e g e d to hope f o r th
* St j but how many
of
us
had
c
o
n
f
i
d
e
n
c
e
, r e a l and assured c o n f i d e n c e , as
ly
c
the outcome?
How many r i g h t l y guessed that outcome?
^
a

From that d a y to t h i s we have l i v e d i n the midst of c r i s e s .
Some of
have been apparent, some r e a l ; but on the whole, they have made l i f e
succesaion of shocks, u n t i l ire are w e l i n i g h benumbed and incapable of
acting to o r d i n a r y s t i m u l i .
m

. r am saying these t h i n g s , as you w i l l d o u b t l e s s have guessed, by way
. " P r o d u c i n g the sadly hackneyed statement that the world f a c e s one mors
l i 1 ? * ^ o n e m ore determining i n c i d e n t .
The conference of n a t i o n s on
^ r o t a t i o n of armament i s about coming to i t s c o n c l u s i o n ; and as it i s
f S s ° l v i n g , we see ahead the economic conference of Genoa about gathering
c

a

c o n s i d e r a t i o n of world problems a s important, i n the sphere of
gnomics, as, i n the realm of p o l i t i c s , have been those which have come
re
the Washington c o n f e r e n c e .
I venture to say, indeed, that most
0£
now here w i l l l i v e to set down as the four grsatest landmarks cf
nQ
w epoch, the -beginning of the European m a r , the s i g n i n g of the
^ • i s t i c e , the Washington Conference on L i m i t a t i o n of Armament, and the
^fcoa Economic C o n f e r e n c e .
I regard it as of the ve~y f i r s t importance
we f i x firmly i n our minds t h i s v i e w of the events i n i t i a t e d at
be -forwarded at Genoa.
At Genoa, f o r the f i r s t time, -rill
a n d
to
,

§

k

0ttlQ
together the a c c r e d i t e d and recognized spokesmen of a l l sides in
th
h9
v ? r 3 a t nfar > to c o n s i d e r the too long-delayed and i n c r e a s i n g l y acute
T h e r e , for the f i r s t t?me, these
^Isnss of economic r e s t o r a t i o n .

3,

w i l l be c o n s i d e r e d , not p r i m a r i l y ag problems of a l l i e d and enemy
but as the overwhelmingly important concerns of a world which

•x
u
. ^ i t ^ n " n ^ v e r known "before,
faces the n e c e s s i t y of a d a p t i n g i t s e l f to con<Ut, o n . nev
and ^ i t h which i t must ortpe s u c c e . s i v . l l j o* e l s e adn.it that
sbheme of

s o c i a l o r g a n i z a t i o n has been a

failure,

a
'
That scheme h a s b e e n b u i l t up b y slow ^ a i
hundreds of g e n e r a t i o n s ,
A f e w short
* S D we
A c t i o n that the problem of human d e s t i n y J ° e ® n
rogd to s u c c e s s f u l s o l u t i o n , and that s u c h j

fi-i r roc esse 3 through
n ^
^
w*re x
^
^
thQ
insured.
so
^
dreams

Today,

trc«va.r

o n

the

other h a n d ,

° r -peace and s e c u r i t y ,
^s
c

institutions.

iviliZed

life

It

^e

right

i«

It

of war and

is recognizing

of human s o c i a l
of

M r x e a

tardily recognizing

from the menace

pestilence.
^ructions

a wcr^yndely

i s meekly c o m i n g ^ t o g e t h e r

for

^
,

tne common s u s t e n a n c e ,

^

and

c

g e

^

disorganization

^

,

insuri,;cr

r 0 C O g n i z e

rcconstruc u . o n .
V

s 3 l /

^

' U n d a r a e n t a i recon-

t h a t there mu&x

I » these

the common man to a l a r g e r

His effort

tne ^

its

^

^

d u o t

^

voice

to a

t ^

^ ^

s
in

:he»

& s r v e

E r e c t i o n of e o v e i w n e n t a l i n s t i t u t i o n s and a c t l ^ " 8 ; h e
of the
o u r s e l v e s , our own time, and our good r 3 P u x ®
these
c o -, C o0.mg
f u t u r e , if at tho o u t s e t we r e c o g n i z e the
recese^y
q£
0 i t h 9 r
fundamental t h i n g s .
T h i s world h a s outgrown the: i n *
^ c
t e n t
t 6
governmental a r economic a u t o c r a c y .
I t i s not
governmental
W e
m the h a n d s of a f e w e i t h e r the d i r e c t i o n c . i t s go machinery, rr the d e t e r m i n a t i o n of i t s economic a i m s .
" A n v eroup of u s , s i t t i n g
^e a l l know and r e c o g n i z e these t h i n g s .
'ny e
^ t h e first
^ our ^ n comfortable d i n i n g t a b l e , w i l l f i n d ou _
an*
cf
djgaui*+,ine
O m e n t a of c o n v e r s a t i o n , c l e a r i n g a ^ y the
also
o u r d u t y
^ s c u r a n t i s t c o n t r o v e r s y , by a d m i t t i n g them,
the world.
b e f o r e
a l l
•'0 admit th^mjust a s f r a n k l y a n 4 f r e e l y m t h ®
' r t a n t accomplishments
^ e Washington C o n f e r e n c e h a s produced l a r g e a n a *
^ ^
s hcwn how
^ l i n e w i t h tho democratic t e n a n c i e s of tne «
'
achieve,
1£ car}
J w h sincere c o o p e r a t i o n of n a t i o n s , i n the gene
.
^ p r c n : i g e A at
next step i n such c o o p e r a t i v e e f f o r t among
^ ^
economic conference s h o r t l y to meet at G e n o a .
^ ^
^
T,1fi
°re i t must rome somewhare e l s e through a p r t s
with e c e n c a i c d i f f i c u l t i e s as the w a a h i n g t o n Conle

n c t

^e

^th

poiixical

ones.

The wcrV

that h a s been a c c o m p l i s h e d

^onomic

department

far
ar

'Onomic

^onomic
^ali

able

when i t i s

rehabilitation.
to which

difficulties,
I n the

to give

9,3 w e l l

to

to

d e a l t

^

taken in

^
t

lar

prepared

w i l l depend
because

the

giving

^

gely

^

^

determine

assure

to go

almost e n t i ^

they w i l l

^
to

and a s s i s t
America c a n cooperate a n
^

long run,

them,

^
iar

to d e a l w i t h ,

the European p e o p l e s are

adopt.

at

for u s to a n t i c i p a t e

f o r Europe

The extent

h a g

-j f o u n d a t i o n

which i t i s p o s s i b l e
p e c u l i a r l y one

ccme

e f f o r t

ge

.

y^

a

^

. ^

them i n
a t + j i l u d e
t a n 0 e

their
they

America

advantage

to

win

them.

„
,
actual participantar
t e t h e r the U n i t e d S t a t e s G o v e r n m e " a l l ^ . ^
^
^
^
^
the Genoa c o n s i d e r a t i o n s or not
^
^
"
^
reached,
t
n h a l l
-ne l i v l i e s t c o n c e r n i n al.l d e t e u m n a t i o n -

- 3Whatever else the l e s s o n of the l a s t seven years ha« b r c u t f j t * «
given us a conception of the e s s e n t i a l o ^ n e s s o

*

»

> «
J '

01

the interdependence among peoples, of ui=
.
'tetes and n a t i o n s .
All this i s not a very
/ e ^ A - '
" {
Americans, whose governmental organisation has
eeK a cocpe.at.on o,
a f 9 d o r a i syBtem.
But to those c o « u i a t i e 8 oi the ( W j r . i a
n a t i o n a l i s t i c ideal has been developed to t t e ^
« » ,
^ P t i o n i s not so e a s i l y a c c e p t e d .
Therefore
l e t us Aaeiic ns,
Perhap s m o r e accustomed to thinking i n each terms than other peoples,
°ur influence to make t h i s conception e a s i e r for them.
The world w i l l not soon or r e a d i l y he brought to c o m m o n
of l i f e .
D i f f e r e n t c o « t m i t i e s w i l l o h n g to

a t a i e 3

standards or
e x -

traditions, r e l i g i o n s , l i t e r a t u r e s , i n s t i t u t i o n s oi l a w a n d e c o »
Nation.
Ho doubt i t i s -veil that they should
f o r i t nas p l a i n l y
*> part of the divine plan that a l l men should he too rnu.h a i _ .
there i 3 somewhere i n the scheme of things a coimr.on dero,ain.to
b/
1(0
may reduce the problems of t h i s variegatea " M X z t l , to i ••
quantities and view them i n the most u n d e r s t a n d s o t - m - i n
belief
that common denominator i s international * r » d f ,
tXllr\y
etande as the solvent, the medium of communication
tno re. /s
*hich we e s t a b l i s h touch and understanding among the various p a . t s .
International commerce i s , of course, intimately r e n t e d to
^ J ^ n '
extern e£ sustenance and alimentation.
Many <^mmumtie. s axe depend
' " W i t t trade for a large part of the means by which to l i v e
tanco
*> national community whose i n t e r n a t i o n a l trade even compares i n m p
*ith i t s domestic o: changes.
Te may, therefore
for a m
_
nutrition,
international exchanges in t h e i r analogy, n o , to the human jyceffl9
^ t to i t 3 nervous system.
Trade i s the primary ™ a n s b y « P C h p e c p
^ contact with one another, by which t h e y f i n d o p p o r t o n i t i e s t o
r
etudy, to recomnize and compare varying
w U h o u t any
1
suspect that if a l l i n t e r n a t i o n a l exchanges were c o n t a ^ e l < .
Ctomercial p r o f i t whatever, the educational value would a « p * y
J « W
Continuance!
I believe that the people carrying on the ^ g e s t vol
international exchangee would derive such advantages in wider o tlooK
^
""ere accurate v i s i o n , more illuminated understanding, that in
it would be set f a r on the way to world l e a d e r s h i p .
The entire transactions in international commerce of £ e world represent hut a modest f r a c t i o n of the value of the
^
^
exchanges
• • m country a l o n e .
Indeed, comparing i n t e r n a t i o n a l n t h ^ " ' J 0
i n _ '
the W J d over, and l e a v i n g cut of the account . h o w
inte
o u r b B l v e s
t s l l e c t u a l advantages which I have suggested, we m i g h t a i b l a - a c
ihe apprehension that international t p d e was : r e a l l y o. mi~.r x P ^ a
4
nd m i ( r h t be neglected without great l o s s .
^en
position i n our own country, i n " C e n t timee
to th .. n , xov
ccn£a
c t that cur country i s so n e a r l y eeli-suf f i c i e n t ana
l^on
.
•tituteo a temptation to cxclusiveness and a l o o i n e s
a. 1 - m,
Prosperity against which we are c a l l e d upon
o e*
cur . a c e s ,
^

that we must keep ourselves m °
' J
p , r n a p s any
neighbors;
Let i t be conceded that we eoulc come ne -r - b
•
V
c t h i r great nation to l i v i n g - - e e l v e s , ^ the f a ^ y e ^ n
^
^
r
not live alonn, and tnat

- 4misfortune and ultimate d i s a s t e r ,

"Rather,

P a rt we can best p l a y in i n t e r n a t i o n a l
^ l i g a t i o n f r e e l y and

it i s f o r u s

relationships,

to determine

the

and to accept out

fully.

I have spoken:- of the i n t e r n a t i o n a l exchanges as -he medium throjfih
* h i c h men become best and most i n t i m a t e l y acquainted with t h e i r neighbt-s
in
every part of the world; for a f t e r a l l , the world i s now reduced to the
3
state of a ereat neighborhood.
I t seems to me fortunate that it i s ^ ^
P°ssible > throueh so comparatively small a volume of commeicral a c t i v i t i e s ,
to
derive so great a social and i n t e l l e c t u a l adv-ntr.^e as cones to the nations
t r o u g h world wide commerce.
I n the long ran, the iyoe w i l l thrive or
3uf
f e r together; there ? s bound to be a s u b s t a n t i a l ultimate v n i t y m the_
8x
P e r i e n c e s and development of mankind; and the b e s t mea^urs ox that u n i l : & » ~
^ o n and mutual undek-standing w i l l be found i n those in t i r a d e 3 of -Irate
^ i c h are presented Q u a n t i t a t i v e l y i n the s t a t i s t i c s of i n t e r n a t i o n a l c o m e r * * ,
^ e c i g e i y to the extent that men have from g e n e r a t i o n to gpHtiWttim: been more
an
<* more dependent upon tne sea as a h i g h l y , — t o that extent they have been
^ ' e and more determined to keep the sea-ways a s secure as p o s s i b l e for tno
ttov
ement of corameice.
p i r a c y , which i n the beginnings was c h i s i l y
* Protest a g a i n s t unreasonable i n h i b i t i o n s a g a i n s t freo trade and communican t s , wag g r a d u a l l y oappresaed because trado was r c c o g n i ^ d , encouraged and
^ g u l a t e d by l a w .
Thus, a l s o , the Reman founder* of m c d e m c i v i l i z a t i o n
^ c o g n i z e d the n e c e s s i t y to bind d i s t a n t oonriuniUea togeuh^i by tne ,±>'st
l ^ t public highways,
I n comparatively recant c e n t u r i e s , there nas d e v e l o p * .
the
i n t e r n a t i o n a l l a w iof the sea, to insure the f u l l e s t p c s s i b l e s e c u r i t y tc
the exchanges of trade.
o have
iiavg come
uoma to
uo the
uiu; time
u.' u® when
'"no" these fundamentals are understood and
*e
the
as
st
t few
few years
years has
has shewn
shewn us
us as
as we
we neve
nf
Cognized,
The cataclysm of the ll a
never
he p
r i v i l e g e of e a s y com9a —
wa
tut
di
now
neoesocviy
*
*
* U z e d b e f o r. e , how necessary
i
t
i
s
to
maintain
tb
.
.
j
T+ Virwj
^ i c a t i o n and economic i n t e r d e p e n d e n c e .
It has ehoivn us more ,han t.- .
U
h a rrade us r e a l i z e that i n t h i s realm of i n ^ m - t i ^ a l 1 relationsn^.pu we
fl^Qj 3
.
-.ami. ri+' ftf T.hP Old 0 lt& S .
great ifflpftfy-amuDttof the old onc-s,
some new instrumeirtalAUes, or •the
t
t r o u g h which to f u r t h e r wcrid-Ti.de c ommercial movements.
Every advanced n a t i o n has developed an approximately complete.code
? f laws tc regulate i t s own s o c i e t y and commerce.
There
^ d o divergence,
« i s t r u e , among these national c o d e s : but each has been
• « the p a r t i c u l a r p e r p l e , and on the whole they have s . r v , a t h e i r p u r p o s e
*>U.
But there has been nothing l i k e a c o r ^ s p o - r f i r g ^ y ' e ^ n t of
hternational law, or of the i n s t r u m e n t a l i t i e s ox i n t e r n a ; : ,r.el c w r f i t and
? » h » n g e , '.rhereby to give i n t e r n a t i o n a l t r a n c e M g < « the same secu. . t y t h a <
enjoyed by domestic t r a n s a c t i o n s .
There i s need to- part d l - r e f f o r t ,
th
e r e f o r e , further to rogjlace and insure -ho politf.oaj. r e l a t i o n e oi
s
°verei(rn pcirers, and a? so the commercial r e l a t i o n e be'.we ,n f o p l e s .
Conn e d
as I am that the f r e e s t movement and l a r g e s t vo.ume ° f
'"ohansres would constitute.. the f i r m e s t guaranty of p e a «
I am un^i aix, . . d l *
®*0te4 to the idea that we need to give . s p e c i a l and w . H a n t e U i f f c n t
attention to the development of xheoe means oy which to e n c c r a g e , to
S
*J>9dite, to insure a l l the processes of world-wide trc.de.
,
To no country i s t h i s o b s e r v a t i o n more a p p l i c a b l e then to our own
> are the foremost c r e d i t o r n a t i o n .
are a l s o the j r , » t » « w j s r x t u l
tur a i
„„i,n
" a possess the eleMonts ftom wnich to
-ie i n
created!

t h e " ; a est f a b r i c of world-reachIng f i a n c e that has
T o t only have we the resources and the fortunate

P°aiticn, but a l l the world appeals to us to u t i l i z e these and to take
th
® lead.
It becomes, then, merely a question whether re f u l l y recognize
°th the opportunity for ourselves and the o b l i g a t i o n tc o t h e r s .
No
country ever had the chance of world leadersnip that i s so l ^ e r a l l y forced
u
*>°nug,
it i s f o r us, while r e c o g n i z i n g the duty ^o our own people

b

maintaining absolute p o l i t i c a l independence, to g-ao? this opportunity.
contribution In material things i s c e r c a i n to carry with xt also a
Cc
rrespondine part i n the social and i n t e l l e c t u a l d i r e c t i o n o . world a f f a i r s .

^

If I h a m ^ e e m e d thus far to speak somewhat i n g e n e r a l i z a t i o n s ,
\Propose now to consider some s p e c i f i c phases cf this matter
8l
*ce international trade r e l a t i o n s have been important, nave xhe
monetary f a c i l i t i e s for world trade been so disorganized as now
.here
a widespread impression that the problems of interna-!;:ional finance
n<
*exchange are irrevocably bound up with the complexities anu d i f f i c u l t i e s
domestic f i n a n c e ,
I believe we have too r e a d i l y a d a p t e d
^
that thereby we have been misled into overlooking some sea^ oppoituiu taee
r e h a b i l i t a t i n g industry and commerce.
I believe
, n short
t n 1 0 is
^ B i U e and necessary i or us to work out means oy which a p e s s a r y s e ^ e n t
\l the w o r l d ' s credit and r e s p o n s i b i l i t y may be sot aside and dedicated to
the
special purposes cf international commerce.
T

Every banker amone us is f a m i l i a r with the methods by * h i c h special
of the national revenue of embarrassed states h a v e r e . e ^ d i / Leen
gated for the purpose of serving and u l t i m a t e l y • erfingui shing p a r t i ^ u i a r
^ligations.
ThetLing I have i n mind i s , very b r i e f l y , ^
apply that
f i n c i p x e of segregated credit and r e s p o n s i b i l i t y
m or er to P o . i d ^ a
^
uniform, and reliable b a s i s for the ^ a n c a c t i o n s
international
Granting a l l thax may be said about tne ^
^
^
^
^ m s
i ^ s involved, I . a m nevertheless prepared to make my own m o d ^
^ t the thing i s p o s s i b l e , that i t can be made
" h a t ±l

» * U

Pr

* * u c e vast and prompt b e n e f i t s
.

A

«"it8eof

^

W a r n sense w
«

rPf

T

i n a l l trade and commence.
arred tc the service rendered to

accounting and

« t h f n

in itc

"

i t c i v V ) a

the general igncrar.ce of e . c n o n i c j ^ n c
* acles than confront ua today,

® •encourage i n t e r a a t a o i m
*

trade

oh

e

K

were

ar,le

S

t 0

e 3

" f

t

mounted
p

far

eI

^

r 6 !

ncl

groater

ccntrtuoted

e

_

s t a b i l i t y aa cculd now be

ths
^

pi

Z

d

„

rc8

greatly
i„rtes

^

e / a i

of

tne confidence of

r ^ r u t e x c e p t ; o n , they contributed enorcoualy
commercial inportance of c i t i e s « h i c h ,ere thei

a.
x„ ~
The ' - e t c r y of monetary

ys ^ e

under a f a i r a n a l y s i s ,
und
?

the convir. « o n that i t i « ^ c m J
p u n t i n g and s e t t l e m e n t f o r an
'•hoae in inter na tional trade, ana
'
0{
d i 3 o r g a n i 3 e d domestic oonoy c o n d i t i o n s

to

l i t

will,
x

I think,

ffia4iu„

of

trmsf.ctiono, namely,
, t h i 3 trade above the ruek
.

Our own experience with state and f e d e r a l c u r r e n c i e s , a n d , before that,
*ith the c o l o n i a l and c o n t i n e n t a l c u r r e n c i e s , j u s t i f i e s , , the b e l i e f that a type
of
i n t e r n a t i o n a l c u r r e n c y , based on e s p e c i a l government guarantees and on
^ P l e gold reserves, could be brought into e x i s t e n c e and made u s e f u l .
Nobody who ha3 been f o l l o w i n g the development of i n t e l l i g e n t opinion
® gar ding t h i s set of problems, can doubt that proposals of t h i ^ k i n d are
Constantly becoming more and more r e s p e c t a b l e , l e s s and l e e s l i a b l e to the
that they are c h i m e r i c a l and unworkable.
The f u n c t i o n s of an
international bank of erxi*ange, c l o s e l y a r t i c u l a t e d with the f i n a n c i a l syc ^ m s
the p a r t i c i p a t i n g c o u n t r i e s , ^culd have to bo worked out i n care and d e t a i l ;
ultimate scope would be determined by e x p e r i e n c e .
r

Whether such an i n s t i t u t i o n should engage.:, i n deposit and discount
R a t i o n s , has been the subject of much d i s c u c s i o n .
Thai i t should do so,
nf
°
i
n
i
n
g
i
t
s
o
p
e
r
a
t
i
o
n
s
c
a
r
e
f
u
l
l
y
to
the
f
u
r
t
h
e
r
a
n
c
e
of i n t e r n a t i o n a l
t
would not be at a l l d i f f i c u l t to c o n t e m p l a t e
th
0

P e r s o n a l l y , I do not regard myself as at a l l b o l d ,
thoughtful c o n s i d e r a t i o n of such a p r o j e c t s

when I

suggest

*

^o are a l l g e n e r a l l y f a m i l i a r with the b e g i n n i n g s of the Bank of
ftgland, which has for two c e n t u r i e s been the w o r l d ' s synonym tAr soundness
and yet
found ji tv
s qb e g i n n i n g s i n
q> ^solvency, emu
yo i which
»iu'/ii a
~--the nation**. n e c e s s i t i e s
the B r i t i s h Government, and whose o r i g i r a l c h a r t e r was g r ^ - e d i n con0ration of c e r t a i n advances to the Government secured b y Government stock,
9r
i c a n s are more f a m i l i a r with the procedure by which Hamilton e s t a b l i s h e d
t£
0
f i r s t bank of the United S t a t e s , making the consolidated debt of the
republic i t s b a s i s •

A

lcl

It i s not d i f f i c u l t to trace the analogy between the c o n d i t i o n s which
^ l t o n c o n f r o n t e d , and those which would be faced by a competent authority
t e m p t i n g to do a l i k e service for the world of today,
Hamilton f i r s t conX
the d e b t s of the s t a t e s under the wing of the f e d e r a l government's
p° idatod
e
<Ut,
.

That gave the new s e c u r i t i e s a power of a p p e a l i n noney markets

J

where.
In p r e c i s e l y the same way, l e t u s imagine some agreed proportion
i n t e r n a t i o n a l o b l i g a t i o n s which are owing to the United S t a t e s from
similarly guaranteed,

and issued

in c o n v e n i e n t

denominations for

sale

the general investment market *
In a cooperation of the pew r f u l governments and banking establishments
the world
those s e c u r i t i e s could be made the means of b r i n g i n g together
reserve of gold and c r e d i t f o r the c r e a t i o n of an i n t e r n a t i o n a l
t* ^equate

of
1

bank.
Such an i n s t i t u t i o n might i s s u e an i n t e r n a t i o n a l currency, or i t might
^
u
c
t i t s operations i n t h e terms of American d o l l a r s , Swiss f r a n c s , Dutch
>
J j r ^ s r a - of any money system that i s recognized a s securely on a gold
Former S e c r e t a r y of the T r e a s u r y Shaw r e c e n t l y proposed the
v Jloyment of the American d o l l a r i n settlement of i n t e r n a t i o n a l t r a n s a c t i o n s ,
u
t i n p out that the amount of d o l l a r s that would require to be a c t u a l l y
Sped'frcro country to country ingofrMAwwhteirculd be almost r e d i c u l o u s l y
c

c

- 71

i n

Proportion to tho volume of business done.
The idea of an
n o t
a^
^ti0nal trade bank
e s s e n t i a l l y d i f f e r e n t , and i t would
ppeaiy m o r e e f f e c t i v e l y because it would not be subject to the charge
m c n e y a n d
too
Ranking system of a p a r t i c u l a r country wore g e t t i n g
a
im
prestige.
I do not b e l i e v e the thing impossible or
P r a c t i c a b l e , provided we have v i s i o n , imagination, and i n i t i a t i v e
cu
g h to lead usibfcoa c a r e f u l e x p l o r a t i o n of p o s s i b l e methods*
i

C e r

3u

Th9

u

ti^ity

such a system ig so obvious a3 h a r d l y to need

V a r i o u s of the groat n a t i o n a l b a n k i n g establishments
o f ^ t i o n .
a
of v
raong -*hich we are perhaps more f a m i l i a r with the Bank
ranC9
the Ban
be e
'
^ o f E n ? l a n d , a n d the United S t a t e s Bank®, had t h e i r
1Uni gS
i n tho
n9Ce
ai*
*
3 3 i t i e s of governments i n c r i t i c a l times.
Napoleon
73 r e f o r r e d
nevo
to the Bank of France as " h i s " bank, and though he was
r Q ^ r a V 3 r y g o o d f i n a n c i e r , he f u l l y r e a l i z e d h i s own l i m i t a t i o n s i n this
ard

and

reposed great confidence i n M o l l i e n , h i s m i n i s t e r of the
T>10 f a m o U 3
Havr
sta^^ *
e note of M o l l i e n to Napoleon, w r i t t e n i n 1 8 1 0 ,
trA+v,
today ag one of the very c l e a r e s t e x p o s i t i o n s of the purposes and
' ™ods 0 f b a n k g Q f i g g u e <
7

etfp
that i t i s time for c o n s i d e r a t i o n of measures to apply
in ? C t i v s f orms of i n t e r n a t i o n a l cooperation to t h i s problem.
Such an
^ t u t i p n would f u r n i s h to e v * r y country not o n l y an i n c e n t i v e , but a
P a ^ T * a n d e v o r i r P r o s 9 n ' t a i ^ , "to b r i n g ' i t s own currency systsm up irward
the
raQd unl
*av
i
international transactions.
I t s power over the
4i

l 0 S

raon

®tary
exchange would c o n s t i t u t e a leverage upon governments
too r e c k l e s s l y to i n f l a t e and debase t h e i r own domestic, currencies
i&i."
^ u r n w o u l d be the most e f f e c t i v e pressure upon governments to
t h Q i r
the^
budgets b a l a n c e , to reduce t h e i r e x p e n d i t u r e s , to l i v e w i t h i n
tc l r C U r r e n t revenues; and t h i s , a g a i n , would be a powerful i n f l u e n c e
K9g
P governments i n the mood of p e a c e ;
^ifsd ^ ^ ^

™

amon

a

man

with the genius of the younger P i t t , the
the v i s i o n and imagination of our own i l l u s t r i o u s
the
° n t o p o i n t the way to b r i n g order out of the f i n a n c i a l chaos of
Thin i s no time for men who would be l e a d e r s to i n s i s t that
i3
£ i s impossible, simply because i t i s u n p r e c e d e n t e d .
If there
W a / a n k e r > a n economist, or a statesman i n the w o r l d , who in 1 9 1 4 would
Si I 0 Q l i e v e d that the f i n a n c i a l and economic accomplishments of the years
Ug C f
would be p o s s i b l e , I w i l l admit h i s s p e c i a l a u t h o r i t y to t * l l
t c a n n o t be done i n this realm.
The nations have been
eight years doing from day to day t h i n g s that any sane man would
0
said eight years ago were i m p o s s i b l e .
They have done them in almost
rable departments of human a c t i v i t y ,
If they could do them under
di
f M c u l t circumstances of war, c e r t a i n l y they can do more of them
Ur,
Qr
e a s i e r c o n d i t i o n s of poace, 'vhen c o o p e r a t i o n i s so e a r n e s t l y
Uj
-reri and so a b s o l u t e l y n e c e s s a r y .

fo
W
j

'

o a n

and

-

v;ha