New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-18

Edward King, president OF the Union Trust
Company, Of Network. says the rigid rule en-
forced by the Nev-York Clearing HOUSE. As
ISOLATION. requiring trust companies affliatsd
with the associationto maintain q minimum OF
10 per cent OF deposits after July I. 1904, could
not be made operative. The withdrawal %
nearly all trust comhnies from their connsc-
lions with the Clsarin, House" he said. shows
that such plan canno be made effective. II -
both wise and prudent however. for trust COM
panies TO maintain a Moderate reserve. leaving
the percentage and the disposition OF such = re-
serve 70 the discretion e the trust company. To
require trust companies 70 keep a cash reserve
Oh deposits amounting, n the case OF al New
York city trust COMPARES, TO over t4oO0o.ooo,
or at least Ssoo0O.ooO, Il he Clearing House rule
had become operative, would be % retire tusc
that much from circulation as a dead asset IN
crease money rates and impair the stability OF
this money centre TO that eegrse. To deternins
upon fixed reserve Is an action obviously IN
wise and mistake, as viewed IN thu light Of tho
situation to-day"
In reference to the same subject OF withdraw
ais, Mr.. Curtis at a hearing az Albany recently
said:
You should not be frightened BY the buEaboo
OF a possible withdrawal OF a large sum OF
money from circulation II banking with 10
reserves is safe. then let rs have the National
Bank Act amended 70 10 per cent, and n New
York City alone II would release one hundred
millions OF dollars"
Il am IN favor OF legislation for trust com
panies requiring a cash reserve Of per cent
and 10 per cent divided Up IN deposits n deDosi-
tary banks and IN demand loans" said Charles
7. Barney, president OF the KnlckerbOCker Trust.
This protection would be adequate, and would
fully answer the argument made by members o.
the New-York Clearing House that practically
no reserve IS maintained against the total de-
pOsits OF $I18,691,S40, as reported at the be-
ginning OF the year 1904. The assertion that
there IS no reserve maintained by trust com
panies against these deposits is misleading.
Trust companies maintain q reserve in cash de-
posted IN the banks and demand Wall Street
loans.
Although there may be a variety OF views on
the subject, am convinced that prOcrasrina-
ton Is unwise, and that the earlier this problem
IS solved the more advantageous il will be for
all"
The reserve proposal has not been demon
strated as a necessity said George ". Young,
chairman Of the board OF directors OF the United
States Mortgage and Trust Company, in a re-
cent article IN The North American Review
The record OF experience Is not available for
that line OF argument. The most that Is claimed
IS that It ts a necessity threatened. II IS the
future welfare OF the trust company depOsitOrs
about which there Is such deep concern Their
welfare in the past has been abUudantiy looked
after by the trust companies themselves. II q
be sure, the experience of over thirty years has
demonstrated that the -rnight-happen' has
not happened. The argument simply is that &c
might This IS the sole ground on which has
been based so much anxiety for the safety Of
trust company depOsitors. The inference sought
postors and the loss OF their deposits there is
no safeguard. matter how faithful 10 their
responsibilities the trust companies may have
| been in the past"