The Washington herald., 1914-08-12
IN Stockholm in 1si2. He served as presi-
dent Of the American committee.

IN bLOCh1Oln IN 4Hlk. he served as DrCHl-
dent Of the American committee.
The European war win furnish from
time TO time events Of great Importance
IN the financial world but Il is the be-
lief that the money market IL now 50
well protected. both In London and New
York. that It will be able TO withstand
all future shocks.
As London Is the center Of the inter-
national money market, stability must OF
course rest with, the maintenance Of Eng
lands supremacy on the high seas. So,
that, aside from all political considera-
lions, bankers TO a large extent favor the
victory of English arms. One Of them
said yesterday that Il hardly could be
imagined what would happen in the world
OF finances should England meet with de-
feat and London fall into the hands OF
Q foreign power.
outside Of such a contingency the banks
Of the world have q Arm hold on the sit
uation. The English bank rate has drop
ped to 5 per cent and the French bank
rate 70 per cent
Probably the most expeditions return
to normal conditions viii take place in
the markets Of the United States. There
is no trouble in the interior Of any kind
and the banking position there can be
looked upon as quite satisfactory. The
New York money market. however, has
been the buffer between this country and
Europe. II received the first shock with
ample precautionary measures and while
II must be ineonvenienced for some time
yet, there are indications that improve
ment Is taking place. The worst trouble
has been In the foreign exchange mar
ket. owing to the stoppage Of our ex-
port trade and the inability to realize
on foreign credits
One Of the FIRST things to be done by
the Federal Reserve Board will be the
selection. OF thirty-siX directors in Class
C. three for each regional bank from
whom are to be chosen a chairman and
a denhty chairman fHr each bank
Owing 10 the present unsettled conditions
there Is little chance that the board will
force the bank to change from the pres
ent to tina new banking system at once.
This would involve arst payment by the
bank members Of about sll45O0.OOO to the
regional banks for reserve money and,
second, 900 for their subscriptions
10 reserve bank stock Although the
member banks could redIscount a nor
ton Of their paper With the Federal
Reserve Banks, and in that way finance |
their obligations 10 the new system with |
JUt materially disturbing loans, the mem |
1t will be unwise to force such a read |
iustment in the near future. The Inten- |
tion, however, Is TO c-mpIete to the or 1
ganiZation to a stage where everything |
will be in readiness for quick action later |
on.
When the board Is formally organized |
This week ii is expected 10 be in session |
almost constantly, so as TO consider i'm |
nOrtant rulings defining commercial |
oaper and the supervision of the re-
yicnal banks. Because Of the Eurpean |
;rlsis II may be necessary for the board |
% take up the establishment Of foreign |
ranches for member banks the first
hing
Following the closing OF exchanges I
bond business has been at a standstiIl
Tor more than a week. Houses are re-
raining from any dealings that would
establish a market in bonds, which might
cad TO the disastrous result of calling of
oans by bank. Those Who do not abso-
utely refuse to accept. any orders are
prices on securities that
hey own and what little direct selling
hat is being done is at prices not far
orm the high prices OF the year, and is
all In unlisted securities
Bond men see evidence of a piling up Of
Investment funds In the United States
They believe that IL the exchanges can
'e opened with assurance that prices
will hold steady, this money will take in
'estment securities out OF the market at
rapid rate. As new financing has
eased practically and is not likely to
'e undertaken for some time. the sup
'ly OF investment securities naturally is
lot showing its normal increase.