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RIIT COPY - ..LIBRARY
ADDRESS OF HOI;. D. H, OPISSIiJOSK, COMPTROLLER OF THE O O T ^ ' J V ; T I T L E D "QUE.
"EJLfcE SPONS IB IL IT IE S " , EEFORE TKE NATIONAL BANK S i l W O N , AfiMhi^AN BANKERS
A
SSOCXATION CONVENTION, AT LOS ArS'KLES, CAL., OCTOBER 5, 1 9 2 1 ,
^LEABHTD FOR EVENING PAPERS OF OCTOBER 5, 1 9 2 1 .
*
?? P A RT OR INTIMATION OF TPS CONTENTS OF THIS ADDRESS
^ T I O N OF THIS RELEASE INJUNCTION.
l
H
V
I
^ \\
O -
Probably in no generation since the principles of economics and finance
to be formulated by thrnkers has there been less confidence in these as
^ a c t sciQr-.es than there i s today.
Everywhere there is a groat looseness of
j i n k i n g ana of theory about these v i t a l a f f a i r s .
We a l l rdrrevbes that when
starte
th
< i in Europe at the middle of 1914 most of us, end most of the best
" -orotic thinkers, confidently believed that war on such a gigantic scale would
^ C Q Q s a r i l y ^ o f s h o r t duration because "economic exhaustion" would supervene
-^compel a return to peace.
we had been taught, and we almost universally
. e U e v e d , tha^ the complexities, the a r t i f i c i a l i t i e s , trie c7.os?ly articulated
; n terdependenc
of parts in cur modern economic system, would make it impossible
r the
social; machine long to go on functioning, for people to be fed, and
0? ,
•?ith° d a n d h o u s e d ; i n a t i m e w h s n 3 0 v a s t a Proportion of men 7 s energies were
ndra?m from production and devoted to destruction.
to f
TVh0re
is
the banker among ycu who would have dared, seven years ago today,
,
this convention and declare that the financial and credit fabric could
the strain that it has borne since that day'"'
e
t0n
v ^
lin
Ve
9 r e
^ e captain of industry who would have risked h i s reputation by
g us that the industrial structure would have sustained the demands that
been imposed upon it?
^
it
^oint out to me the master of transportation who would then have told us
" ^ n s p o r t system of the world - its merchant marine, its inland waterways
3
rail and other highways - could have survived af ter having so much taken out
t h a ^ a n d 3 0 little put into it?
^hore is the sociologist
whc would have b e l i e f .
° U r 0 0 0 i a I institutions could livo through so long and fearful a stress, and
c
Q
forth so little changed?
^
1
come to you from the Office of the Comptroller of the Currency, with a
0 f assurance regarding the tried and seasoned instilments of bankinga n c 8
.
They have not only weathered the storm, but they have come forth
e ^
0n
g e r , slunder, more firmly held in wise bounds, than ever t j f o r ? .
You
y0
may have been too busy to 3top and realize it, sc I am going to tell
ssagQ
a
nd
American banking and finance have made progress in the If-at docade toe 1 q s s - that nobody would have dared believe possible.
I do not mean
t o r e l y P r ogres^ toward larger totals of assets and resporsib.'Mj fcy, out progress
> the wider, rigger, more socfal appreciation of and relation to their place
^ the communi'.v.
^e have passed beyond the time of provincial ism.
Tou htive ' \
^ * ^our backs to the burdens that an anguished world cast upon thorn; you
carried the accumulatsd l i a b i l i t i e s of a disjointed social system; you
t 0 .' 3 r i s e n almost overnight from the parochial to the cosmopolitan attitude
W a r d these questions. ~ I tell you these things, net to tioklo your vanity,
to , ^ e c a u s e I know.
It is my business to know, ar.d I sit up nights in order
o n X
i l
•
* *
£
^
y
> '
>
ln
this presence to express ray acknowledgment avid appreciation.
Y
c
u
h
a
v
e
d
o
n
e
s
0
h
a
e
a
o
r
k
1
h
a
t
1
a
m
a
b
l
c
t
o
r r
i
v 9
j L
a
t
-
2
-
° U r ° n d of the l i n 3 ~ on the 3 i d e of
deration and supervision gpuflrht
to
be
appreciative.
helpful.,
construe
t:\ve. ^ have not teen
G
hav
burden of those time a shefcld te distributed too u n f a i r l y .
we
^^ o seen hem as times when only the fullest cooperation could adequately
6onanon
Our*'6
interest.
% have sought to e n l i s t that complete cooperation,
aim
^
ensure
that
the common weal should be tuat&ined by the
e0R
c
^°Offlon
Oflttllftn re __
sour-ast
*e h
^
as
u
^
^e have ~-t times been painfully aware of cases of bank p r o f iteering;
^ u s t i f i e » hoarding, of over-fed reserves, of dangerous corpulence on the
side of the sheet.
There are bankers who have played more than safe and
for
c o d others to bear more than their f a i r share of the loads.
Their
1 am glad
to
is not v e r y
i t
dc nc h a n n f o r
tc
say
?reati
n thsse
d " ^ h a V e °U U Ir ec y e oon
xnsse over-cautious
over-cctuxious ones,
ones, and
ana that
xnax we are
cii o not
au u
®Uch ^
tc I S ? ° S 9 d
their favcr,
Thebankarwhc conceives that his sole responsibility
iiv-d m n ^ a i n a P r e Postercus reserve or earn an unbroken succession of fat
t h i h ] / n d S ' i s n o t ' i n o u r v i a w > t h a b e s t banker.
Bather, we want bankers who
labor ° q u a 1 1 7 o f their community, of industry needing the life-blood of credit cf
a e r a t r e q u i r i n ^ employment, of business crying out for encouragement.
There is
c
o r r f i d o f n n g P r e P ° n d e r a n c e of such bankers; and they have brought us sound, safe,
ent thus far on the road, to restored business and normal conditions.
rate ^
we have been seeking to make credit more available,
interest
S a
buttax on business, money supplies e a s i e r .
There has been gsneral
Xov, n 0 t U n i v e T * s a l , support in this e f f o r t .
The bank that gets advances at a
from the
by
Federal Reserve System, and only seeks to increase its profit
of
syag
that privilege is not doing i t s part.
The Federal Reserve System
m0riQ 0 ln"tended for such purposes.
Its advantages in easier, more liquid
i n •the S U P P ' 1 ' i e S ' r r Q r e i r r k e n d e d t c b e passed on to the business community. J • jt
•7e oy 1 °-] m3asure that we are able to make credits easier and rediscounts cheaper,
ex
P e c t bankers to transfer those benefits to the business of the
Xr
e expected to understand that banks are a convenience and a
aa,j
^
business - not that business is the ever-ready supticrt of high
^ t highep banking profits.
da
7'?e L e t ^
you a particular case.
i ons
f o r
The other day I saw the report of a
r3di
in th(
'
s c o u n t of paper with one of the Federal Reserve banks
o(fQ
^st.
one hundred and eleven notes were in the portfolio.
They were
a s sec
lO *
^ r i t y for advances of money at 6 $ .
Mow 52 cf these notes were at
c
enterrG°nt^ 2 x a t 9 p e r centi C 'at
per cent, 14 at 8 per cent, 13 at 7'} per
7
cen
^ear/h
t ^ 2 at 6s per cent and 2 at 6 per cent.
That is what I
u
v. ^ . v v .
wim
J-W lljj as
^ VJ itV goes
V w o on
W i » it
X. V will
•» X X X be
JK? pretty
» W V V JT nearly
e e i Q ^ t a n l c P r ofiteering,
and
so long
>S f r
. °
^ a nks to protest against the issuance of charters for new and ccme in
s t i t u t i o n s in their territory.
It shews the barometer of banking ccn4,9
nee
an
*
-ive
°ther.
An application came for a national bank charter
® l l town where there were already a national and a State bank.
I looked
.Up-> learned that they were of the class I call profiteering banks - and
Sori. G r e d the new one.
So long as profiteering gees on the danger cf just that
of
thing will persist.
in a
thQm
s
a
is my pleasure to bring you word of a vast improvement in the general
ess
by
and financial situation.
The last half year has been marked
in t h 2 t e a d y liquidation of credits too long standing, and a persistent increase
G
of cash available for accommodation of current business.
The
by whatever standard judged is better now than i n many months.
?
o r a f6
months I happen to have been the o f f i c i a l M a d of the Federal
^ 9 r n m e n t * s agency for supervising the vast fabric of eta- national banking
«7stem„ i h a v e C 0 I E Q i n f h a t t 5 r n e t 0 a
j.-prc.ssive realization of the
aT£
^ n a n c i a i p o v r e r this nation wields.
Our banks, of a l l classes, possess
^sources and responsibilities aggregating more than all the rest of the banking
sources of the world.
We have in the last few years - the years of the
c / I 0 n i e t r i a l f o r o u r -^ole social scheme - seen this financial structure of
her r ' r o u ' expand, strengthen in a measure far beyond anything we would have
U c t - V S d Possible.
Truth has again proved stronger than the most fascinating
v e r , W q h a v e seen the justification of our economic theories, through the
had
hava t e c r t s t h a t
^ost feared,
^orld-wide conflagration, universal war,
S W C p t Con
'^isc
"tinents and seas; yet a t the exid, despite seme scars and
oraforts, the financial and industrial structure corses forth greater and
l o n g e r than ever.
v
that l h Q t r u t h i s > 1 1 seems to me, that if we w i l l be f a i r with the institutions
, a o r e h a v e served us thus well, we w i l l havo to admit that they are stronger, sound*
the »
than we ourselves believed them to b e .
I undartake to say that
lnstituti
iaeritT
° n s , against which for generations we had been hearing the prpachF0r ®
^topianism, are more strongly established today than when the war
gan,
h a s S Vl0 v7n u s
+Vi
- '
^ow strong they really were, what they could do; while
1
,
- a x u
a , Russia
nussici'5
xi'icn. of
oi ultra-radical
ux \,ra~ r«va it cx j.theories
x.nocnos on
ena vast
va-sv scale
s^ctxa ha^
qv,^
other
side,
s trial
1 1 a
tha k
mU8t
fed
'
understand^ how far those theories yet are from
°tion
anything like a working hypothesis.
^ i d g e that has brought us this far over, I tnink, is built on pretty
lines.
,ts factor of safety was mors generous than even its builders had
;ve11 to a
Plan11
" d ' WQ
ttempt no sudden departures in structural
8
*
^
* found, it is true, that not a l l the parts were equally strong;
s
tre V ° ^ a v e
advantage of knowing now which were weak, and how they can be
ex
the ^ 5 1 6 1 1 0 d %
P e r i e n ° e has taught us to take a more charitable view of
9xpedi0nt3
^re
, to dare experiments, to recognize that vision and imagination
P a rt of the equipment of true statesmanship.
Scu
ca,
n
too ° n e t h i n ? t o 1oe v o i d e d , i n this era following the tenseness of war, is a
tvf r 8 a t r e a ° t i o n toward fixed and immovable institutions.
have found that
r e
xperiment of making our institutions more plastic, more elastic, moie
aj
S
have not
to v
'
necessarily weakened them,
Tte have learned that in order
2ar the extrem0
kilo
strains they required some remodelling and adaptation. me
^ that
the war had gone on fcr another year th&re would have been much
•
ther progress in this reorganization and readaptation.
^e saw the methods of
^gorous autocracy applied to great democratic communities, in order to en£orc©
that were borrowed from the programs of socialism and
C o ^ m i e s and efficiencies
know
int n i S m *
" ^ a t our own country, in another year of war, would have put
an
industrial and economic mobilization, far beyond any that was
a ly
m
tha+ *
inaugurated*
e -vent far enough toward this mobilization to convinco us
in
the necessity persisted, we could have made it keep the economic
machine
i7q ° P e r a t i o n alongside the war machine; made i t keep the mechanism of production
ing at a high enough speed to furnish materials for the machine of destr^vtion.
ourseiveB
growing more and more efficient at both production and demolition;
19 l e
I,**
s s o n was so impressive that few of us dr.re to guess how much longer we
Snt have g >ne on.
^^
ba .
saw non-essentials rigorously cut out from cur regimen,
5n order that there
greater production of the necessities of war and of l i v i n g .
We were
to u.iierstand what thrift and economy really meant; to recognize the true
^ i f i c a n c d o* cooperation; to realize i n the broadest way the u n i t / in ^vhich
na
tion3 ;
peoples, continents, are h3ld;
4 -
—
the common reliance of each upon a l l .
And then came the end of the great, feverish, inspiring strain; - the reacti
excesses o f individualism; the resumption, a l l too soon, of the old easy
^ 7s of living; the renewal of luxuries and speculations and excesses; - and befo
^ had f a i r l y realized the full implication of the revolution we were starting,
' in
recklessness of v i c t o r y ' s hour, -Tell-nigh thrown away the test
nefitg of our discipline and self-denial, and left ourselves only the burden of
and grief and d i s i l l u s i o n .
imagined that victory was the end, when in fact it was only the pause for
a
beginning.
Those to whom victory did not come, those who tasted the dregs
were perhaps in some ways fortunate to have forced uncn them the reali
^
for them there was nothing but to begin anew, to gird themselves for
a
stru
our
£ g l e t o reestablish themselves.
And because of this, we nowadays fin.
n
° t infrequently wondering whether at last the victor or the vanquished
Prove the greater sufferer.
of
Uo
°Ur
0,731 C o u n t r
y
e
^ r g e d from the struggle with its relation to the world
changed.
Greatest of creditor states, we realize both the demands
sta ^ a r 3 p r e s s e d upon us and the obligation tc meet them*
^e have come to underw3
°Ur •
cannot thrive alone,
^e cannot be exceedingly prosperous with a i l
\q1 r i c - 1 9 s while a l l Europe is hopelessly impecunious and destitute,
^e rant to
^ P, but we are determined not to be imposed upon.
-3 recognize the superiority° U r e conomic and financial situation, but we are coming to see that no existinr Qg a n i s m i s f u l l y adapted to distribute the strain and enable us to bear this
^Ponsibility.
In short we find ourselves confronting a task for which we are
^
^ * i a v S " the n e c ® s s a r y strength, but for which we fear we lack training in
O c u l a r skill, i n technical experience,
.
The circumstances demand that we assume a role of leadership.
The r e h a b i l i V
Europe is the key to our whole economic and industrial situation.
, V i t r e f f a c t i v e l y help "to rehabilitate Europe by merely doling out aid without
! 0 . S m or foresight.
Our part of leadership must be played by using our influence
induce Europe to help herself.
a
of
mon
'o
t h s ago an American publicist who had particularly good opportunitie
and
i t S devel
'hat
^
° P l E 2 r l ' t s b o t h i n this country and abroad, published
-iQ ,
seemed to me a statesmanly plan by which American leadership could be maa
1 r e f e r
to a h e l p f u 1 ,
to an article by Mr. Judson C . ^elliver, on "Europe's Debt
n er i ca,1
and
Th at ' " '
J
this debt might be made the means of a groat service to Euro;ar-t
icle was published in the American Review of Reviews, and I vish it might
readi
Stat
" S a n d thoughtful consideration of every public man, economist,
^sman and financier in this country and Europe*
^elliver pointed cut that the old economic scheme of Europe had been
^he^* 13 ^ a P a r t ^y the war, and put together on => now and utterly unrelated lines,.
ec
Shi
onoraies had been adjusted to certain long-established political relation
pG a n
^0v
d national boundaries.
In the redistribution of territories and •
re
i g n t i e s , these economic cireurnstances and interdependsncies were lost sight
international boundary lines were moved about with utter disregard for the
if
on commercial and industrial conditions.
In the excesses of the new era
^ e n s i f i e d nationalism, tariff barr iers and governmental regulations inspired
(
O i u r a C i a l ar1<i w a r P r 8 indices were raised along a hundred lines where they could
s
*rve to prevent exchanges and cooperation absolutely necessary to the
?
sic es
'-Ht
°n
* '
Transportation systems were torn to pieces, the free move°f commodities was interfered with in every direction.
C i t i e s and industria.
areag were cut off on cue aide from Khi^.r source of necessary suppi2
and on tho
other
side from the populations that had ir3r.enorfc.ll7 constituted the vr markets.
^ e new map of Europe -was drawn by the p o l i t i c i a n s i n utter di regard of the
^ r n i n g a and protestations of the economists.
There resulted inevitably a chaos
money, and credit, and transportation, and t a r i f f , and p o l i t i c a l conditions,
made i t impossible for Europe to employ the old machinery of service to itthat had grown up through the long centuries.
Let me quote a f t * sentences
Mr. Welliver 1 s articles
r
' 't we could imagine oUr forty-eight states struggling in everlasting
competition, with tariff walls around them a l l , and industrial jealousies every'*he
* re - then we would gain a pretty f a i r idea of the advantages which we possess
a3
compared with Europe.
"Imagine a proposal to erect a tariff barrier a t the Mississippi that would
event Iowa hofs going to Chicago!
?Or another tariff wall at the Hudson, that
keep Chicago meat out of New England!
Think of the wail from both Alabama
New Hampshire, if there were suggestion of interference with the movement of
c
°tton from the South's f i e l d s to New England T s mills.'
Yet the foregoing are
colorless suggestions of the picture that d i s j o i n t e d , competing, struggling
^ r 0 p e presents.
Imagine everything east of the Hudaon consumed with fear of
rferything west of that stream; conceive the Missouri as the d i v i d i n g line between
J ^ U r l y hostile communities; picture the Mississippi Galley turned into a
c
orridor to the Gulf 1 for the perfectly frank purpose of keeping these rivals
["cm;Either quarreling or consolidating - and we have a l i t t l e stronger suggestion
01
what European conditions would mean if applied to America.
Pr
^
"Iron in Lorraine and coal i n Westphalia are natural industrial complements,
"ivorce them by decree of the tariff tinkers or map makers, and the industrial
ba
l a n C e i s hopelessly out of j o i n t .
S i l e s i a n coal presents another phase of the
problem.*
^
After enumerating many like examples showing the economic confusion which^
^ r o p e n o w p r 0 3 o n t 3 j Mr. Welliver proceeds to suggest possible remedies that might
bQ
applied through American influence.
Again I quote:
"TCe are entitled to expect that if we extend credits, we w i l l be helping a
solvent Europe- and a Europe restored to industrial a c t i v i t y , productivity, and
Peaco w i l l be best able to pay.
It will be altogether within the proprieties for
th
® American Government to manifest the most l i v e l y interest in a l l trade, f m a n e , .
economic arrangements among the states of Europe, with a viow to protect
^ o r i c a n interests.
All the obstacles which r i v a l r i e s among European states^lead
^ e m to erect among themselves injure American trade.
America has as much right
to
insist on policies that w i l l further i t s interests, as have others of the
Allied powers.
If it did, it would be serving Europe as well as i t s e l i ,
It
be pursuing a policy calculated to produce mutual confidence and- concord
aci
ong European people, to strengthen the argument against war, to break down .he
animosities, to extinguish the flame 0i ancient hatreds, and a t last to bring
£u
r 0 p e into a condition of real, recognised interdependence among .its par es.
"The most effective present use for our huge investment in Europe i s , ..n
W t , a s a lever to l i f t Europe toward a policy of commercial enlightenment
ba
Qed on the idea of continental free trade.
The surest way to help Europe back
to
solvency and the capacity to pa7 us is to induce Europe to adopt this policy,
3
^oth would gain, neither would l o s e . M
6 ~
This proposal i s , then, : h a t as a conditio:, precedent to continuing economic
to tluffope, our Government should urge that
one s*e'ep a-,ay the barrier a
H ^ s y operation of industry a m cc.amerco, and
- I V U U h so^ethirg approaching
xne
Continent-wide privilege of trade with the least possible restrictions, such
as
have here in the V/nited States,
I am convinced that fcuia is no counsel o<
^Possible idealism.
The most earnest appeals for our financial assistance
^nstantly come to u s .
It it i s to be exterded, it should be in pursuance of a
sfln
i t e policy of this sort,
ld
...
Along with its chaos of economic and industrial conditions, Furope is
£ d i e t e d by a chaos in i t s currency systems,
Throughout most of the continent
7 e gold standard is either a memory or a fast fading and highly insubstantial
Even where there is s t i l l pretense of maintaining it y reserves are ins t a t e and d w i n d l i n g
Europe's gold, the w o r l d ' s gold, continues to flow to us
nt
U , tardily, we are coming to recognize that it is only worse for us - t. have
00
^ c h gold than for other countries to have too l i t t l e ,
^e have gold i n f l a t i o n ,
nd
,
"the others have oaper i n f l a t i o n .
Exchanges are demoralized, and commerce is
^ r g e l y a natter of speculation i n exchange,
These uncertainties vitally affect
* forms A credit and svary transaction of trade.
In some recent addresses T have ventured that a baa!: of international exchange
l
lines of the medieval banks of exchange in the commercial c i t i e s of both
^ r t h e r n and southern Furoue, mieht. be set up, perhaps with branches throughout
lhe
continent.
™ith i t s capital provided by s-nd'eates of bankers throughout the
such r.n institution wtujS be able to maintain the gold basis in the trars^ t i o n s of int-rnational trade..
It would raise that particular branch of commerce
vo a
leval of i+s own
of the domestic currency systers of the various
countries.
n ths
Such institutions accomplished exactly that in the middle ages, and would do
gain.
Each country would translate i t s own depreciated currancy into the
; s t ^ l i s h e d ui it of t' is irternationol institution, ard thus tpuM be provided
bot
h incentive and instrumentality for the early re establishment of a sound mone 7
System. For the greater u a / t , ne.chaps e n t i r e l y private backing interests would
° Q able to furnish the capifc?! for such an institution.
Located in one of tne
^ r e a t capitals with b'rarrhec in the different countries, it would be the natural
^ t i n g point for the conversion of a l l media of credit, such as b i l l s of exchange
ter
Meulen obligations, and the l i k e , into an accepted money and exchange u n i t .
So
a
Since this prooo^al was f i r s t put forward, it has been widely discussed,
the Secretary of the *ieasury, Mr. Mellon, has recently ta.een a long
toward its realization by proposing conferences ir the different countries
thi
* fall to consider currencies and exchanges.
I shall not here go m t c the
ar
gumo n t for such an institution ox international exchange, or the exposit. on ot
possible u t i l i t i e s .
These nave been set fortn by o t h e r s b-tter q u a l i . x e d ,
ln
°luding some of the greatest economic authorities c: a i l time.
and
,
It h. s been said and 3 t is true that some of these exchange oanks came at
° t to a bad end.
In at least one case such a tank was crameo of i t s ^ o m r e s ,
^ e e d f a i r l y looted in the mcst modern fashion, by the city fathers of t h t o , n
t bad c h , tered i t .
But this only proves tnat tne b,nk oosses,ed e x c e p t i o n ^
it l , , g sustained both its own l e g i t i m e e l i s o r s , ana the b.oken down
r 6dit
municipality,
^ h
the ^ n a P - r x o d : l c
ep rts^and
n
la
y
^ general a i l measures for protection of the public x n t e . e s . s M .
^ • w n about banks, it *ou!d ha/e been perfectly safe and sound
say^^t
om.
>[ these medieval excharg, banks came to disaster, is rot ov any mean. to P
^ a t their basic idea was v a , u e . e s s .
As well condemn tne whole sy.tem of issue
ds
7
? o « i t banks, because there have been bank failuren!
1519
faBt
is that we have ccme uocn a tisc
.Then we need to revert to tnea el
:
a n k . of exchange.
Of course w , * u * t jracopniie that at the out«.t £UC. ; a
^ W l d immediately confront the need for Ascr.can support, hacking, afld - &oio.
*s have the gold,
-e are constantly getting more of i t , un-;il we ar-, g-o - s
s i ! e i l o u S h to wonder -tot we shall do „ith i t .
Is there not enougn cf fiaan.- l
*»snanahip
among
us
to
devise
a
method
of
u
t
i
l
i
z i n g so>r> cf : t as our con .
t
t 0 ca
P i t a l i z i n g such an institution or group of institutions cf intem-t.cnal
*?f*ge as T have suggested?
It would of course be done in c o o p e r a t i o n ^
^countries.
In my vie-, the participation of cur country . h o u d be
on such reform in i t s finances, such readjustment of its relations ,-th its
J-gibora, such removal of economic restrictions, such concessions in tariii,.,
rs
9
Present the substantial beginning of compliance « t h
arid
liberal trade
the demand for more
relations.
J
t is no answer to suoh a proposal, to cay it is visionary and 9 f ^ " t a l .
not reject everything that has never boon tried before; and i t happens that
^ exchange to deal with disjointed mov.oy situations have beer, tried ana
Z "
The exchange banks of the middle centuries had to
W e « h a n g a conditions quite as demoralised as those cf toaay; and they did not
r ® the hacking of such organized, understanding, conscious forces
could no»
3
r
rayed in their support; yet they became tne financial founders o modern times.
v
A „.
A
s to the 'Tillingness of Europe to accept American counsel, to c -Pl'/ ^ t h
conditions by removing obstacles to conferee, there can
»rious
Z**«.
Not only is our right of making suggestions recognljed, cut cur financial
t T Genomic power is suoh that a l l possible conditions would be met.
ct,r
^U3and ti
{ o r u s t 0 participate i n putting F.urope on its feet in a
Z * ^ ?
than to go on doling out charity wherever the latest and
intense
s
iress i 3 presented,' with no defined program of permanent rehabilitation.
t,
Seginning about the middle of the last century, Europe assumed or. a grand scale
r
° i e Of capitalist for America.
Europe's b a k e r s and capitalists
the
> s to build our railroads, develop our industries, open our m i n e s
create our
> c i p a l utilities.
Is there a man among you so young that he cannot remember
the daily piper brought its daily story of the European aynwo-te t n . t wa
over" some great American industry, or facility, or transportation system,
now, that such otovieo were only the journalistic t h i n g s to -he
> U n c e m e n t that more and more European capital vas being enlisted here
e know
N
the partnership between our opportunities and Europe's capital
good for
S?*> Europe and us.
« 9 knew, now, that European financiers had
the imagination, to see these opportunities in a land to wh.oh t n p o p u l *
N
had not ye? come. They dared to provide funas tor railroads for a vouo.ry
i ^ t had not yet people to use them. They h a . courage to ouiid
u>
f t to be populated.
They ventured tc open mires for .vhose wealth there were no
u?0
r s i n sight.
And because they thus splendidly dared not - I n h e r e but ^ 1 1 the
° n t i n e n t E o £ t h e vorli
the ma-ters of European finance iraoe
c * "
! f / r e a t i o n ; made European fin,roo the lever to l i f t mank.nd to the . e v , ! of
® oi srn in^tdtu'ions
i«-id Europe lose by its enterprise'
tether,
it orofitsd so
f 3 a t l y thlt the least of the continents in area became well-nigh the ruler of the
c
,
loa
H o . things have changed. Europe need* what we have,
"here she
^
^
»ed she noS would borrow.
Where
formerly were so poor that we were glau
of
h
lf
8
* r loans, we are now called upon to i:wa«t abroad,
T7ili protect our future intsvuet .in
m i l we do it?
^e rtust,
.Id t 4
*hen Europe began, several d e c a y s
to invest expensively ar.d
j8tenjatically in the United States, i>- did
not for the aj-twwtic
^ l p i n g u s ; n o t e v e n w i t h the .primary' p u r g e s of grot lag the profits on i x S
Its underlying object was trnfo.
That has always beer the foreign investment!
European investors bought storks and b o w s in xno
^ U r o a d s of the new continents, in order to control sales of
to taem.
or British caoital financed a railroad I n the A r g - n ^ i r a ^ ^ u
J® Qur© that the r a i l * , 1 o^o/no tires, cars, equipment of that
.
f i s h e d by the country that provided the c a p i t a l .
It
the caaio >sv*r/wa^e the
industrial right hand and the financial l e f t hand helping uo *ash .acn
^hen Europe began investing here, it was in a new country, ^ f ^ o f
the
speculative, sparsely peopled. Rut Eurcpe took the c h a n t s , . o r the b w ot
^iness.
Now Europe a . k s financial fce.p from us but asks us to take no su ;; h
it offers us the security of the oldest society of tne
f ™ ^ ; r c e s
great, skilled, thrilty p o p u l a t i o n ; c* half the property and V ^
™ ™ ™ *
l l the world,
w i l l we hesitate to pay back/aesitate to pay back ou* debt to
when by doing so we are certain i x v r w r to strengthen and enr, i ouro.lve.j
Europe and the United States, joint?.* constitute "the p o w e r house of the
of occidental c i v i l i z a t i o n .
They v w . net survive separately
.hat
v i U z a t i o n w i l l be sustained by their 3 oint efforts or - i l r ^ J *
£ 8 Collapse * For Gotf-'s sake, let us have v.ne c o ' J - V
'J; . '
^
face and dare the measures needed to deal with it.
Leo ua g^t to our people
accurate, comprehending vision of our new place and responsibilities m xn.
^orlo.,
v
*
all understand that ours i b the greatest
r e s e r v o i r
of wealth and c r e d i t .
are the great creditor nation, and must continue so
ShM.
be m rc money
Anders, advancing from our hoarded store on the deposited valuaoles of impecuAiou
Cu
stomers and issuing pawn checks that will remind tnem everlastingly ^
th^r
to hate us? Or shall ,0 assume the big, constructive ::o.U ox
we be the pawn-brokers, or the bankers, to the wor.d?
b.alx £
a
part of the management stock, or be content with no interest
ft seams to me perfectly clear that wo are antitied to, and must demand, a ,hare
the management.
As the custodians of tar more than our a p p o r t i o n : ^ oi the » t i j ' »
P
®«B't accent that we are w r e l y trustees for ib* U n o c a l world in h o l i n g it
I
the world understand
the Great American Desert, or sale m the f.tl
*
^cognized as a s ^ o o l .
it is to the { i n ^ - ' a l
of the ^ h w » t the
statutory reserve oi a ban!: i S to that i u ^ u t i o n - not a t r e a . r r , of Dives^to
hoarded, but a pneumatic cushion against the trie ot need, ,o
ise us dotn tc
formal levels again.
For generations Britain . a s the gold headquarters of the wort
>
the one
assured {fee market foe tne standardising
™hy
Becau.,3 she was too « i 8 e to Co a r=i-;er, a ®»re hoaruer.
bhe
»
g ^
v
cnw
f uff
Sha ha.id nerse-U as xrus^se,
r
«pute was worth more than tone of ^ha y e o . . u . .
hr-e n
behalf of the c o ^ e r c i a i world for a l l the gold th.it
to her
She l e t it
6c as freely as she lot i t * ™ .
She
bern the one o n ^ a r , a l f
gold; a n d in doing so she r»ede herself the financial capital of all creation.
-
9
-
Now, our turn i s come to do that same thing for ourselves and a l l the r e s t
ths world.
Are we b i g ana wise ejiougn to do
i f
Let ae make myself p e r f e c t l y c l e a r .
The huge gold store we now possess i s
i n law and f a c t ,
-e ^
plug i t ii:tc : u r t e e t h , cr tin!: U y o n ^ r 3.u th«
Pa
c i f i c if we l i k e . B « t if we would rise to our p o t e n t i a l place i n the society
of
nations we w i l l use it to help a l l the world together,
^e can spare enough
of
i t to buy us a partnership i n the reconstruction of Europe; and m c i d e m t a l l y
* w i l l be doing Europe the service that she needs f a r more than she needs charity.
tta have the gold, the wealth, the producing c a p a c i t y , the c r e d i t .
Have we
courage and the genius to b r i n g forward a plan that w i l l insu: : to us and to
the nations the f u l l advantage of t h i s r e s e r v o i r of resources?
1 beii-ve we
h
ave, and I am confident that American f i n a n c i e r s , statesmen and r ople w i l l
> n they understand the s i t u a t i o n and bow "it involves t h e i r own •> LJare unite
^ supporting such a plan,
I submit, as the outline of that p l a n , one program
of
r e h a b i l i t a t i n g Europe, with American p a r t i c i p a t i o n , through a scheme ot
^ a b U i ^ g exchange, u n i f y i n g trade mediums, and removing the a r t i f i c i a l barriers
0
easy commerce.
**
•
It i s quite true that our f i r s t roenocnsibilities are to cur own people, I .
the l a s t to forget t h a t .
Charity snculd b-gin at home, and even more
be
sh
0Uid good, sound business methods.
have here the richest continent i n
n
atural resources, that God made.
I t spreads before us a boundless field ot
invitation to e n t e r p r i s e , adventure, i n d u s t r y .
w e must build railways . o r i t s
commerce, f a c t o r i e s for its industry, houses for i t s people,
"trxnust provide
Va
5 t works of i r r i g a t i o n hers, of drainage yonder.
If it was a . U the worvd to
it would absorb a l l our energies f o r c e n t u r i e s to come and r i c h l y repay our
forts.
But we cannot l i v e thus to ourselves a l o n e ,
^e are part in a world-wide
7stem.
Along with these r e s p ' o n s b i U t i s s to our own, we have ocher and unas-^
capable r e s p o n s b i l i t i e s to tho r e s t of mankind,
w i l l best discnarge these
^ t i e s to our own people aul nation, : •! wo -,.111 open w<ds our eyes and admit the
^ U v i s i o n of our duty to the whole of humanity.
I n short, the world must be
3
unit of thought,
•opportunities before
cf v i s i o n s ,
of a c t i o n ,
if
we are to make the most of tne
ua„
-e have passed the era of that old-time statesmanship which d e m a n ^ "-hat
o we care for abroad"?
^ have to care for i t .
w- kept out of -he war . i l l
^ore than half i t s course was run; some of us protested to the la ^ against
getting into it a l a l l , s t i l l demanding "What do we care for abroaa'?
But we
h
ad to get in, and now we know the.t because we delayed too long lr getting m ,
we paid a premium for every day of d e l a y .
d
So i t is a s to the w o r l d s task of r e h a b i l i t a t i o n .
must play
a
great
Part,
A few weeks hence, the r.atronr are coming a s our g u e s . s , to consider means
of controlling armaments, moderating taxes., restoring the balance to government
budgets.
I n the e f f o i t to accomplish that surely the barkers, whose e a r l i e s t
lesson is that the balance sheet musv; present a precise balance, can be relied
u
Pon for support,
who so well a s the barker can be expected to r e a l i z e that
p
»
,
. .
vnisnpfl
i ^ to be saved?
The conference
c
^ V i i i z a t i o n must make i t s ubudget balance «.i iv ic> xc ue b-v u
°n limitation of armaments represents the e f f o r t of society to make i t s b u d 3 e t f i s c a l and social as well - come to a
balance»
-
10
-
p
rom this conference so uregr.ant with p o s s i b i l i t i e s of gooS to mankind,
I*
is hopeful augury for solenoid results.
There i s premise to . )t cur feet
l;
he ri
th
g h t path.
But, even if the effort for limitation of armaments shall open
U u 7 t o P e a c © a ^ d restoration, we w i l l s t i l l have to deal with t. * enormous ^
ol economic readjustment; and that can be done only through th
whole-hear.ed
J u r a t i o n of our country.
That cooperation we must g i v e , w e t t e r we like or
e
s h a 1 1 779
Sive u
grudgingly, meanly, aimlessly and hesitatingly, and
^
the hatred and contempt of the world? Or shall ^e extend it ir che big,
^d
understanding manner of business dealings with a business : .oblem,
^ n the love and admiration of mankind? Shall we go on dissipating
Sn
^
pandering in the jungle, without guide or compass; or shall we boldly
dr
vn a course, and set ourselves to hew a path straight through to the end,
J * h i c h a l l may travel in security and confidence?
That is the ^ay to which we
.
^customed; it i s the one we w i l l adopt, for it is the American way.
th
000——
i
@FedFRASER