The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-13
FINANCIAL NEWS
AND COMMENT
Steps Taken Here to Liberallze
National Bank Reserve
Requirements.
WILL RELEASE SOME GOLD
Purpose Is to Enable Country
to Settle It's Debt Account
Abroad.
WILL RELEASE SOME GOLD

All tho Indications pointed yesterday
to the probable success OF financial efforts
here and abroad to establish in the near
FUTURE basis for the resumption OF op.
crations In the international money mar
ket Advices from abroad suggested that.
In continuation OF the policy which the
Bank Of England has begun TO outline,
other developments were 10 be expected
which would facilitate tho relief of the
foreign exchange market from its state
of paralysis. Here there was every sign
that banking and business interests had
realized the opportunity presented by the
Bank OF England's plan for the accumu-
lation of gold reserve at Ottawa and
we're preparing Ia cooperate I'm the en-
deavor to revive the credit processes by
which modern business il done and as
the first requisite we're contriving way
TO release some gold for transfer to
ottawa.
There was a striking coincidence In the
announcement from the British Consul
Generals Office that the western Atlantic
Ocean was safe for shipping as far south
as Trinidad This OF course was re-
sarded as n sign that the embargo on
shipping was beginning to be lifted. Ac-
cordingly the events OF the day might be
o'll W nave Hdu tD1TlS pIOr11lbS OF n par
tial solution of the problems OF pressing
importance how to move goods and COM
modities in International trade ana how
TO finance tho movement
There was overnight a good deal OF
change OF attitude on tho part of the
banking community toward the Bank of
England's departure IN planning to
gather reserve in Canada against which
Il could conduct operations In the
worlds central money market, London
Barly In the day II became apparent
that there was n spreading disposition
To recognize IN this chance for dis
charging tho debts which we owe abroad
on various open accounts maturing now
or in the near future. IL has all along
been seen that the American banking
and business community must either OBJ
tain n moratorium hero or allow It's in
d btedness abroad 20 go by default and
at no time has there been any inclna-
ton even TO consider population. The
task set was 10 find some way 20 demon
strate both the solvency and the integ-
rity Of the country. and Il seemed yester-
day as though the way had been hit upon.
A. a meeting Of the Chamber of Com
merce shipping committee In the fore
noon Il was decided 20 propose to Wash
ington an amendment TO the national
banking act by which. at the discretion
OF the Federal RI serve Board. national
banks should he allowed 20 hold part of
their reserves against IN bank notes. Later
in the day the idea began TO prevail that
In all proba billy the powers Of the Fed
eral Reserve Board would be found ade-
quate TO deal with the subject and bring
about the conditions which were aimed
al. Tho essential purpose OF the action
contemplated Is to release from tho RI
gidity OF present reserve requirements
enough gold to begin the liquidation OF
l. n
chiefly by accounts held against US in
London.
There are objections 70 he offered 10
the frst expedents proposed which are
not valid against tho employment Of the
powers OF the Federal Reserve Board, but
in any case whatever Ia done will not
merit criticism. because IL will con-
tribute to the preservation OF the coun-
trys commercial and financial honor
1t IS doubted II any considerable quantity
~ gold will have TO he transferred 10
Canada for the Bank Of England's re-
serve. because il is morally certain that
the evidence afforded OF the country's
good faith and ability 10 pay its debts
Will operate to end the deadlock IN the
international money market. Credits will
then become available for the discharge
OF debts and II will only take few
weeks OF an export trade movement to
turn tho foreign exchanges strongly in
favor Of the United States, showing that
credit balances have replaced debit bal
ances
Nominal quotations continued 10 be
made yesterday for demsnd exchange,
but a liberal supply of French cable
transfers was available as result Of
the Morgan arrangements made with
Paris. II IL also likely that individual
banking interests will carry through sue
cessfully some negotiations for estab-
fishing credits here IN n manner similar
to the Morgan-Parts negotiations.
There was a budget OF routine news
which under ordinary circumstances
would have attracted much attention and
which had some influence over Wall Street
sentiment IN general. The satisfactory
termination OF tho controversy between
the Government and the New Haven rail
road by what was practically a return TO
the original dissolution agreement was
OF itself matter OF Importance. Among
other things Il undoubtedly denoted the
tendency which the emergency Of the
times has set up 20 compel q reasonable
adjustment OF questions whenever II Is
possible 70 tighten the general strain In
that fashion. The Federal courts sweep
ing decision at 81. Paul against the In
tcrnational Harvester Company was
rather in the nature OF a surprise. At
the same time Wall street was not al
together astonished at the application OF
law In the company's case.
Rulinga were made by the committee
which has charge OF Stock Exchange af-
fairs during the period OF suspension
which offered an oftcial but very linn
tied market for transactions in listed
securities, The rulings are not designed
as some supposed to promote trading,
but the contrary. Their object Ia TO pre-
vent az far ms possible the formation OF
IN irregular and outside market OF grow
ing proportions.