Los Angeles herald., 1907-11-09
N. Y. BANKS
SHIP GOLD
TO INTERIOR
DEMANDS OF SMALLER CON-
GERMS SUPPLIED
WEST AND SOUTH MAKE DRAIN
ON RESERVES
Twelve Million Dollars in Gold Brought
by Lusltania Brings Total lrn-
ports Up to Forty Mil
lion Dollars
RrAssoo,aisa Pres.

BY Associated Press
NEW YORK. Nov s.-The leading New
York banks are exerting themselves
actively today to meet the demands Of
their country correspondents and depos-
itors for currency They declare the sug-
gestions made from several western
sources that they are not meeting leglti-
mate demands for currency from the west
are entirely unfounded and that they are,
on the other hand, taking every prac-
ticable measure to aid the west and
south.
One large bank, with several thousand
correspondents, has depleted its reserve
by about fourth during the last few
weeks to supply currency where it is most
needed. and has made large shipments to
banks in the south.
The country banks have been allowed to
draw down their balances to the point
which affords, In many cases, hardly
enough to meet the drafts sold in the
ss.:ss..e1 course of business. They have
brought paper for rediscount to their New
York correspondents in large amounts.
and the principal difficulty Of the New
York banks has come from the demand
for currency to be shipped against the
balance created by these rediscounts.
AS the rediscounts have been in the
nature Of an accommodation and have
not brought a cent of currency to the
discounting banks, they do not feel that
they should be called upon to supply cur
rency in large amounts under existing
conditions.
Discrimination Necessary
The best possible Judgment is used in
meeting these country demands for cur
rency 1t is not usual except in special
cases to ship all that is asked for. but
T. al trff1er
around one-half, the proportion varying
according to the cash strength of the
hank calling for additional currency, or
the supply demanded for legitimate pur-
poses.
Special favor is shown the small in
terior banks, where there is no clearing
house, because it is realized they are not
in a position to count on cooperation
and the use of clearing house certificates.
1t is admitted the cotton movement is
seriously checked by the lack of small
bills and silver to pay the small growers
and by the inability of the southern banks
to handle the immense volume of business
accommodating at southern points.
The grain shippers are in better shaoe,
owing to the gold secured by the banks
of Minneapolis and st. Paul. and arrange
ments for paying cash in New York on
grain bills.
The New York banks feel bound to re-
tain certain portion of reserve to guard
against possible contingencies, because
they fulfill in substance the function
which is fulfilled in London by the Bank
of England, and in Paris by the Bank of
France.
Lusitania Brings $12,ooo,ooo
The aid which is being rendered to the
situation is indicated by the fact that ths
total engagements of gold have nov
reached $40,000,000. The total was ma
terialiy increased today by the announce
ment of several purchases which had not
heretofore been made public. OF the
amount engaged, the sum of $21, 81 900 has
already arrived, including So, ,366, 150 which
was laid down from the Lusitania this
morning. This gold will afford the basis
of nearly $500, 900 in loans.
The fact that practically $50000,O0O N
currency disappeared from the New York
hanks within week, as indicated by the
last bank statement, is considered SUI
ficient evidence that the New York BANKS
are doing their best to meet the demands
made upon them. The total of last week
is computed upon the basis Of an actual
loss in cash of about S300O0,000 in face of
the fact that $30,000,000 of public money
had been poured into the New York
banks. 1t is not possible to determine
what proportion of this $6O,0OO,O00 went
west and what proportion went into
boarded safes in New York
1t is estimated in some quarters that
about half the amount was shipped TO
western banks, but other bankers put the
proportion somewhat lower, leaving the
balance to be accounted for by boarding
Panama Bonds Sold
OneAof the measures which has been a
subject of some consultation between Sec
haY1 yo--
here has been the sale Of a block Of
Panama construction bonds The manner
in which this would benefit the market
would be by enabling the bonds to be
used as basis for national bank note
circulation.
Several steps will be required which de-
part a little from usual treasury practice
to enable relief by the sale of Panama
bonds. 1t would be necessary that the
money paid for them, which under
treasury rules must be cash, should be
deposited in national banks. Otherwise
the amount paid would be Withdrawn
from circulation and would make the stu
alton worse than at present
Finally 1t would be necessary for the
banks engaging in such an operation 10
have ready bonds acceptable to the
deposits derived from the proceeds of the
sale of the bonds.
A still further step to promote imme-
date relief would be that the comptroller
of the currency should have notes printed
and ready for those banks which were
able to bid for the bonds and were able
TO ind adequate security for the money
paid for the bonds now deposited with the
treasury. Whether relief could be OBJ
tanned with sufficient promptness to jus
iify all the steps involved in this case
is a matter that has not been fully de-
cided upon at the treasury department
II is somewhat doubtful if all these
steps, including the offer of the bonds to
the public before the practical demand
for currency has been dulled, will be