The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-12-02
NLEL.4T7ON OF CURRENCY
LS.NONl THE DISCUSSION
Financial. Men Are Dreading the
Il Export Of Gold to
Europe.
BANKS ARE. NOT BOARDING

Re-establisl1ment Of Credit Will
u Lead.to Resumption OF Relations
4, Between Money Centres.
4 NEW YORK. December IA call
Il upon tile national banks for a state.
ment OF their condition of very re-
cent date is expected by bankers here
to come from the Comptroller of the
i Currency this week.
4 -Four of tho five calls required eacl,
4 year by law have already been made.
the last having shown the condition
i OF tile national baltlss on August 22d.
!, 1t is possible that the call now antici-
/ pated will have an important Influence
upon the financial situation. 1t is en-
pected that 1t will reveal large reserves
|of cash in the country banks. and this
/ Will tend to restore confidence among
ldepositors to degree which will make
1 1t easy to resume currency payment
throughout the country. The banks,
even in normal times. usually prepare
for a call by strengthening their cash.
in order to make a good showing not
only to the comptroller. but to their
| clients. Thei. statements are required
by law to be published in local paper,
and they are also forwarded to Wash
ington. where they are compiled by
cities and States.
Banks Not Honrding.
The effect OF n call for report of cons
dition on fixed day, which is usually
a few days before the call by the comp
troller. Is to enable the bank to re-
lease cash after the call with the
knowledge that another call is not
likely, In the natural order of things
for about two months. In the present
situation. II is declared by New York
bankers. tile call will show that hoard
ing Is not being done by New York
bankers. as indeed their deficiencies
In required reserves already indicated.
but that many Of the interior banks
have reserves running up to such pro-.
portions as 40 or so per cent. of de-
posits. The facts will reach the public
for individual banks through publica-
ton locally. and then will come to the
public generally through the compila-,
lions made by the comptroller.
If large sums in lawful money in
their vaults are revealed generally by
the reports. 1t will at once inspire
confidence in the strength of the banks
and create demand which they Will
no longer. be disposed to resist. after
sending in their reports. for the inme-
diate resumption of currency payments.
Significant Change.
1t is significant of the change in
financial opinion that most of the dis-
cussion amongst financial men'last week
dealt with the dreaded effect OF state
of Initiation OF the currency. into which
1t was feared the country might emerge
with the passing OF the effects OF IRA
tional distrust
The bringing forward OF this sub
ject into debate, while the premium on
the currency was being paid yet and
other active meas for relief Of the
due TO the plain lesson OF experience III
past crises Of similar kind. In all
of these the first return OF confidence
and the re-establisliment OF credit have
brought condition of actual redun-
dancy OF the money market, a heavy
accumulation of banking reserves and
a free export movement OF gold.
Export OF Gold In Danger.
While the enormous mass Of gold
that has flowed to the United States
in response to the urgent requirements
developed by the crisis is admittedly in
excess of the normal requirement OF.
the coming period, the return flow OF
gold is bound to have an unfavorablc
the event of it's undue stimulation by
any Initiation of paper note issues.
which would tend to force out gold.
the danger OF a check being added to
the recovery in commercial activity is
taken anxious account Of The deci-
sion OF the United States Treasury De-
partment to limit the allotments of 3
per cent Treasury notes and to accept
no more bids for them was the out
m Of
Which the turn towards normal condi-,
tions has developed. The opinion OF
the Treasury Department that the sec
rotary may call in these certificates
before their one-year period has ex-
pired. and SO provide fortthe Immediate
requirement of all bank-notes issued
against them. offers another resource
for contraction in the event of any
symptom of Initiation.
In another direction it is hoped to
find permanent and substantial em-
ployment for large amount OF the
gold that has been rushed to the United
States as a relief measure.
New York Communication.
The commission appointed by Gov
ernor Hughes to consider changes in
the New York State banking laws is
cnjoined to report conclusions by the
|1Ith of December. While the exact
terms to be expected Of the recon-
mendatons OF this commission cannot
he foreseen, 1t is taken for granted
that they will include drastic reform
in the requirements. upon trust COM
panies for holding casl, reserves.
The recent crisis has demons ira ted
the inadequacy of present reserve re-
Fqulrements for trust companiestdoing
an active banking business, which
most OF them DO. OF is pointed out
also that "a more Favorable moment
for effecting this reform could hardly
be chosen than the period now be-
iieyed TO be approaching, when the.
large inflow Of gold will be found SUI
perfluous for the diminished needs of,
the circulation, and will tend to flow
out again.
Import of Gold.
Engagement OF nearly 500. 100000 Of
gold TOR import, of which approximate
~ s6000o,OoO has been received. the.
deposit with the national banks OF