161 



N / 



ing documents they arc ideal, since they are essentially 



short time loan documents. 



As I have remarked before, the invest! ^ public, of 

 this land appears 1o favour the latter, and when they 

 cannot invest in entei prises which permit, easy liquida- 

 tion they appanvntly prefer to keep their money idle in 

 the banks: the same line of reasoning obliges bankers 

 lo follow a similar course of action, they utilise, when 

 they can, th"ir funds on short time loans. - 



Naturally I do not pretend that warrants will do 

 away for ever with crises, for the very nature of credit, 

 its complicated organisation, forces one to recognise 

 that crises are inevitable, but by partly eliminating the 

 present customary speculation over our grain, which 

 constitutes half our entire wealth in products of the 

 soil, and in the issuing of a class of commercial paper, 

 backed by a fundamental article of universal demand, 

 easily negotiable, and easier annulled, a continuous 

 steady movement is given to our finances and crises 

 made less probable. 



WARRANTS LESSEN CRISES. 



This point must not be overlooked, that the money 

 in the banks which now exceeds the enormous figure of 

 3000 millions paper, is that for which the owners have 

 apparently no present need, and which, through the 

 banks, they place at the service of the public, until 

 such time as- they can find a use for it themselves. 



By offering opportunities for cafe investment on 

 short time documents, warrants are particularly attrac- 

 tive to bankers, and are the antitheses of speculative 

 papers . If the most powerful "stimulant to speculation 

 is the facility to discount bills and documents at long 

 dates at the banks, even admitting that discounts on 

 warrants had to be accorded over~ and beyond the cus- 

 tomary "plaza", (occasionally these must exceed the 

 customary term), the fact that their security is not of 

 a permanent nature, obviates one of the greatest dang- 

 ers to the banker, that of permanent or continued re- 

 newals. The easy liquidation of warrants is particular- 

 ly of advantage to the^ banker. It is one of the axioms 

 of sound banking that the discounting of documents 

 which, jil low a rapid recomman'd of the resources is al- 

 ways advantageous, and absolutely indispensable in 

 times of crisis. 



Into the question of general banking, and the ef- 

 fects of warrants and discounts thereon, I cannot here 



