The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1908-04-10

comptroller of the currency showing
the condition of the national banks oi
New York City on February /, last,
showed deposits subject to reserve
requirements 10 the amount Of $685.
S8o, ,i05, making a total amount sub
jcct to the guaranty fund require
incnts Of the Fowler bill, Of $071 ,077-
900 The amount required for the
guaranty fund would be five per cent
Of this amount or $48,553,8o5. This
looks at first blush like formidable
amount to withdraw from the cash
resources Of the bank but when It
considered that it Is counted as part
of their required reserves the ques-
tion Is reduced simply to one Of the
locality here the money IL kept Re.
serve requirements would be raised
$225,547, ,lo8 under the existing law
10 $242,760,R5. Of which A8,5g3,8o5
would be in Washington and $lo4,
2l5,SS0 would be in cash in the Gus
tody Of the banks. The New York
banks held more cash on Feb. IA than
would be required by the Fowler bill
and their position in this respect
would not be changed to their dis
advantage
"One Of the greatest advantages
10 the banks under the proposed new
system would be the free control Of
their own resources. Instead Of
keeping in the treasury, as was the
case on Feb. Ia, United States bonds
to secure circulation iof $70,182,l0
u S. bonds TO secure public deposits
to the omount Of $67.243,ol2, all these
would be returned to them and they
would be able to convert them at
will into cash.
"rhe U. S. two per cent bonds
would be purchased by the custod-
ians Of the guaranty fund with the
purpose of withdrawing them from
the market and maintaining their
value The Fowler bill provides that
they should be purchased at the price
Of l04, in order to guarantee against
any loss resulting from their aband
onment as basis of circulation.
Under this arrangement, $40, 782, 100
Of u. S. bonds would be handed back
to the national banks OF New York
to be disposed q to the government
for cash 10 about All equal amount,
which cash could be lent in the mar
ket at current rates, while the privil-
ege OF issuing notes would remain
"a little computation will show that
the ability to lend the proceeds Of
the bonds at the current rate Of in
terest would be an advantage to the
banks. They would be required to
pay two per cent upon their circula-
ton, which is | IL per cent higher
than they now pay and they would
lose the interest on the 2 per cent
bonds but with the money at 5 per
cent they would still make profit
above what they now make, by tie
ing up their capital in two per cent
bonds Moreover, they would have
the privilege of issuing notes in ad-
dition to those now out, up to the full
amount OF their capital in case of
need without tying DIP one dollar of
their resources in any investment in
bonds. This unused power OF issue
of the New York City banks by the
last report to the comptroller was
$43,834S63. A further power Of
issue is given in emergencies to a
second sum equal to the capital, or
SIP, 100000.
"The entire scope of the bill is
designed to encourage commercial
transactions by giving the banks con-
troll of their own resources for loans
to customers, | am satisfied that if
bankers be convinced that instead of
being radical or disturbing it is really
a moderate and conservative measure
which would benefit them as well as
their customers and the public.