Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-11-15
Elastic, Very.

No charge of inelaStlcity can be Iaid
at the door of the new currency meas
ure, as was so frequently charged
against the national bank act, now de-
parting. And yet, the last few weeks
have given to the world an unexpected
view of the elasticity of the national
banking system, aided and abetted by
the administration and the much dis
cussed and otherwise abused so-called
money power" the harmony workers
being members of the party that caused
the investigation that resulted in keen
disappointment and results amounting
to nil
will be found in the release of $780,
900, 900, more or less. that have been
part of the Is per cent reserves re-
ouired by national banks. Under the
new system Is per cent reserves are re-
auired on deposits payable within thir-
ty days. and per cent on deposits
payable after a longer period
The rediscounting privilege was never
before extended to an American bank
by government institution. They
have been able in times of normal con-
ditions to rediscount with New York
city banks and other central reserve
city institutions. but now. if they have
strictly commercial paper, and 1t is up
to the banks to get it, they can redis-
count up to half of their capital and
surplus, and they still have New York
banks and trust companies for addi-
tional service.
Another Reason.
There is yet another reason why Mon
day will be an important day. New
York and New Orleans cotton exchanges
will resume business, after long
period of closure, unrestricted and un-
trammeled. The outcome will be
watched with interest, as it will prob
ably determine whether the million
dollar cotton pool proposition will be
abandoned carried through.
1t is an unquestionable sign of better
feeling, considering the unsettled con-
dition of the cotton market, that these
exchanges have undertaken resumption
and it's permanent, too.
There is considerable talk about an
early reopening of the New York Stock
Exchange. but that this event is a mat
ter of the more or less distant future
Is not source of congratulation, but
a recognition of the conditions that ex-
list, and of certain eventualities that
must be provided against before the
doors can be thrown open for unre-
stricted trading.
Essentials for Reopening.
Among the essentials preceding a re-
opening of the New York Stock Exchange
there must be protection to the foreign
exchange situation in the event of heavy
liquidation from foreign sources-the very
crux of the situation. 1t looks as If it
would also be necessary to organize a
pool for the protection against bears and
their persistent raids, if an unrestricted
opening is contemplated.
Just how the collateral situation would
be settled to save weak holders from be-
ing entirely wiped out is a problem for
f1nancierS.
II is suggested that 20 per cent mar
gined loans might be guaranteed safe
that an assessment of per cent should
be charged against the borrower or his
clients. which would provide a large
guarantee fund.
Some of the leading financiers believe
that there is great latent buying power
but waiting for the exchange opening, but
they would have to be assured that 1t was
a satisfactory opening. and further in.
duced to action by advancing quotations
Mergenthaler Meeting.
About $50 men and women, abou,
evenly divided as to sex, but unanmou.
on one subject, gathered in response to &
call for a meeting of MergenthaIer Limo
type Company shareholders at Rauscher's
yesterday afternoon.
Unanimity was marked in objection tc
any action on the part of the directors
of the corporation toward reducing the
usual dividend distribution. haG
been very strongly suggested by Presi.
dent Dodge in his annual report.
1t was shown at the meeting from fg.