The Birmingham age-herald., 1914-03-28

which handles foreign exchange which is based upon shipments of cotton. Cotton bills furnished in the early days Of the panic of 1907 the means by which the bank was able 10 procure on the instant gold amounting to millions in the London market, and immediately to cause it's eN- port to the United States
 It has also been an inevitable inference that the association of the National City bank with d great capitalist with intent to finance the cotton warehouse was one of the subjects discussed with MT. Stil- man at the time of the recent visit to him in Paris of his successor as president of the National City bank, Frank A. Vanderlip These inferences. however, have as their basis nothing authoritative; l they are pure differences. So. also, is the belief that the National City bank is the l first of the banks of the United States l 10 discover new opportunities which are 1 in the recently enacted national banking and currency law, and, having discov- cred them, is making speedy attempt to take advantage of them. Very likely at the first convenient moment the institu- ton may establish a branch bank in Lon don.
 A New Signal
 The announcement that this institution has partially perfected plans for greatly | extending it's business and usefulness, ] especially after our banking system has been reorganized will undoubtedly at tract attention to banking and business men all over the United States. It will be accepted as symptom of some of the changes, vast and beneficial as these will be. which will be established as the result of the influence of the new na- tional banking law. Evidently the man agement of this institution, probably in | association with MT. Stillman, has made such careful study of rne various feat ures of the new law as enabled 1t not only to prepare itself for the changes which will be essential after the new sys- tenn is organized but also so thoroughly to master the provisions of the law as to learn what the opportunities for banks for increasing business opportunities are.
 What Was Learned
 l IL was, of course, easy to discover that within three years the interior banks of , the limited States must withdraw a cer- l tain percentage of the reserve which they nave hitherto kept in banks of New York city, thereby preventing ending the l heavy flow of currency to New York 1 Whlch has been yearly feature for a generations time. If the National City l bank did nothing to make good the loss ] of the deposits with interior banks which tnese banks have kept with the National Clty bank sa part of their reserves the Institution might find it's dpeosits de-
 creased by perhaps s40,OO0,OO0, possibly l more, The problem apparently entailed l the working out of plans by which the loss ol these reserves might be made good anu the puslhess Of the institution be greatly expanded at the same time
 NIT. Nanderlip and his associates were persuaded While the banking and currency l hlll was under discussion. and esneois I,, 1 at the time the Senate was modif,,;ny | ceflaln features of it, that the enactment ol the Dill into law would be followed l,,, efadual but ultimately very great chanyea
 III banking and business conditions. An parently not many bankers of inc ITnita,i | states nor many business men realiya now great and how important these chanses may be and how beneficial may De made the business interests of tba l United States e 1 but apparently the management of tbe 1 Nauonai City bank Is persuaded that Inc 1 ."s iaW WILL after the system is organ 1 lzed, create especially favora ble onnor l tunities for American banking ena 1
 that without concentrating to any und1,a | extent banking resources money pash ] and credit in New York city. The nrob. ahiiltles are that MT. Vanderlip and l1is
 associates have now an excellent under-
 ataiolhs or the opportunities for expanded ouslfless which the redscounting features
 U the new banking law will create. OnE oi the comments most frequently maoe
 'Aite congress enacted into law the hank ing and currency bill was that the hanks 2i New York and of other large cities
 would not be particularly affected by tbo
 2toNlslohs o1 the law which make the re- dscountlng of commercial paper eas, and
 safe. sS anu
 For It has been said that inc hanl.s oe
 ele great cities have always been difri-
 dent abo4t offering commercial paner for
 ,ediseotht. They have feared lest appre-
 tension should arise that they were in ' ~ aoi,ie eihDarfassment if they should seek ] fedlscounts of commercial paper The i oahks or New York have felt some pride m th efact that, excepting in times of l panic, when they have offered eommerni,l l paper Tor what was practically redis- count by the Clearing House associati i they nave rarely sought to obtain redis
 eouil' Ill tills Way. There are. however i some reasons for suspecting that tho No
 oohai olty bank will, under the new law not hesitate at any time to avail itself ar Iedlscounting privileges. That must bo Its purpose, or otherwise it would not he
 hheiy To contemplate the adoption of n
 cotton warehouse plan. Some 10 or P l wears ago trust institution was organ Eea m New York with intent to special l lze in establishing cotton warehouses 1 throughout the south. It's burmese wa s
 much larger than it's resources and it's credit and experience were not at all | equal to, the purpose. The institution passed out of existence, but it's plan did contain the germs of the cotton ware l house system which, wisely established
 and fairly conducted. must be of great
 benefit to the cotton industry of the 1 south. The warehouse plan will creat te
 large amounts of commercial paper behind
 which stands as good security as bankers
 can ask for. This commercial paper, can
 easily be rediscounted and no doubt thai
 is in the contemplation of the ,Nationa
 City bank It is the understanding of the
 Wall street district that this is only ono
 of several methods the institution has il
 mind for very large expansion of ts
 business under the new banking law
 methods which are likely to be initiated
 by many other of the larger banks of thu
 United States.