New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-13
FINANCIAL RECORD
here And ABROAD
New Plan to Release Gold
nv Counting BanknoteS
i'm Reserves.

., fsr the most interesting develop
- IN the financial situation yester-
was the action Of some Of the
.ters in sending to Washington a
.oosal for using national banknotes
martial substitute for reserves
-,i,st the deposits Of the banks. The
Ion was prompted by the necessity
:, having out gold with which to meet
~ foreign obligations. It was has
.,,e8 BY the imminent maturity Of
49,, OF the Lake Shore & Michigan
,.rtbern Railroad IN London, and OF
..re,re warrants of the City of New
y,rk IN both London and Paris. These,
ne many other obligations Of Ameri-
-, corporations, contain provision
4 their iudentures that they shall be
,,,able in gold. To offer anything else
,s, cold in payment Of them would be
r-scticsily 90 repudiate our obliga-
,5ors. because the moratorium that OBJ
ans a. London and at Paris alike does
M, cover debts of this character.
+ does not seem 20 be necessary that
o,e OF the suggestions made yesterday
hal be adopted, viz, that the national
h,rk sct he amended. so as 90 permit
he temporary change in the character
"A the reserves. The Federal Reserve
Bosrd. under its power TO suspend any
ar AL reserve requirements, apparent
N can take what steps may be thought
issirahle At any rate, the idea Of
counting national banknotes as a part
n reserves, in order TO release gold, is
g yet only a suggestion and not an
accomplished fact. IL is possible that
ls,ead Of adopting this expedient, the
links might propose that they be al
cuci 90 decrease their ratio Of re-
reves; but such plan would not be
feasible now. when the reserves Of a
rood many Of the banks would show no
excess II there was g reduction from
IS per cent 90. say, IS.
The overnight news that the New
haven had made an agreement with the
Attorney General by which 10 will have
4 reasonable opport lnity TO dispose OF
IS Boston & Maine stock and avoid
he unnecessary costs Of defending a
dissolution suit made hut little impress
son in Wall ST., though in all proba-
bl.ty 10 viii count in time, Ike the
ate decision, as one Of the things that
bs restored stock market viii have,
frtunately, Behind il. So, too, the de-
fsion against the international Har-
wster Corporation, requiring its dis
soirron and the submission TO the
courts within ninety days Of a plan for
dividing it into al least three COM
psnics.
The Stock Exchange found it adyisa-
Ne 10 extend its members opportunities
sor trading, and the special committee
"A Eve ruled that brokers desiring 10
tuy securities for cash might submit
rroposals to the committee on clear
n house. the prices not 70 be less
nan the closing figures Of July 30, the
bst dav on which the exchange was
,,en for business. Would-be sellers
sor cash received a similar invitation.
There was more arranging here Tor
me settlement Of international obllga-
s,us through the establishment OF
,eencies for the clearing Of credits
"a the Bank of England's plan ior
,scprirg the deposit of gold with the
7reasurer General at Ottawa, which IL
r,rht count as q part Of its reserve
and issue notes against, gained some
r,ourd IL aroused considerable oppo-
stion. however, among banking houses
isre and the prediction was. freely
-s5e that there would be only very
mel further outflow of gold 70 CANADA