The War and Our Financial Fabric

If gold reserves alone are to be the test of sound banking, and if gold reserves alone are to save banks in the hour of crisis or panic, then the obligations of banks towards the highest interests of the community are weakened. If their wealth, their investments are to be valueless in a time of crisis, to be so ignored, that is, as to be worthless, to be taken no account of, are not to keep them solvent and safe, then on what grounds of reason and justice should the community demand that banks should confine their trading to the highest class of wealth? On what grounds can the community demand that they should in all seasons and in all times do that great work for trade and commerce which neither the Government nor any other institution does? Why should the banks be asked to do all the sacrificing within the limitations imposed by the community and the community not come to their help, sacrifice nothing at all, in the hour of the community's troubles? For the crisis, when it comes, is the nation's and not solely the banks' crisis. If the crisis be none of the nation's seeking, it will certainly be none of the banks' seeking. If, however, the crisis be the effect of over-speculation on the part of the community, it would be mean action on the part of the community to appeal to the banks to save it from the consequences of its own folly.

I urge that, in a time of national crisis, which has taken the nation by surprise, which is no consequence of its own folly, the responsibility should be shared by the nation and the banks. It is possible that it was this high sense of justice, this high sense of equity, that inspired the measures that were taken last August, and that brought the country safely through the crisis. Had it not been for this higher inspiration and deeper vision, and had we trusted alone to narrow instinct and lack of insight, confusion might have reigned, and the consequences might have been as serious as those foretold by the prophets.