New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-07
Defects OF Present System.

Defects Of Present System.
THE trouble with the present system Is
that now We can only lock the stable door
after the horse Is stolen. II is not TO the
interest OF the United States to lose too
much gold. OF which We exported sV'V"oV
last year. hut all we can do now is l"
raise the rate OF interest after the outno"
has started. If the rate of interest OF
discount could be controlled uniformly
that could he checked IN time.
1t is essential that We have strong
reserve bank IN New York. Boston OF
Philadelphia. We could have brahch
here. but it would have to have enough
prestige TO attract the attention OF Eu-
rope believe that the provisions Of the
new system ought TO I've effective ana
bring safety in the protection OF our goa
supply SO long as all the banks CO
operate IN this il is not necessary TO nave
preponderance of strength IN Ne"
York"
Nj. May suggested that there be reserve
banks in New York and Boston one "r
two in New Orleans and Savannah or Al
lanta. one in Philadelphia or Baltimore
preferably the latter: banks In Chicago
St. Louis and san Francisco, and pos
sibly. I'm Denver and Minneapolis Savan-
nah and Dallas. Tex. he said, were the
two cities originating the largest amount
OF foreign exchange I'm cotton.
Henry Goldman, OF Goldman. Sachs
CO.. believed in minimum number OF re-
serve banks i'm orCer 10 make the capitai
of each as strong as possible.
The reserve banks" he said, must
serve to gain recognition in England ana
the rest of Europe Of the American IN
dorser Of paper. and they must have great
capital in order to do this The bill VIII
rot carry out its purpose if the banks are
overshadowed by other institutions. ana
they will be overshadowed if you'do not
capitalize them sufficiently. Their securi-
ties must be as LIQUID as those OF the
banks of England and France, and the
reserves must be strong.
Districts and Trade Lines.
Mr.. Goldman thought ii would be diff
cult 10 make eight banks strong enough,
but thought It could he done. The dis
tricts. he said, should follow trade lines.
New York, Atlanta, Chicago. st. Louis,
Denver San Francisco. New Orleans and
one in the Northwest he suggested as
the best centres He added that they
would get plenty Of business if they were
made strong enough to handle large
volume The act. he thought. was
powerful measure for correction of eX-
listing evils.
Irving T. Bush, chairman Of the finan-
cial committee Of the Merchants Asso-
cIation. told that body's attitude toward
the establishment of a reserve bank in
New York. He urged that the New York
district include territory beyond Pitts
burgh and Buffalo, and comprising all or
New England and Delaware.
Lewis l.. Clarke president Of the Ameri-
can Exchange National Bank, also
thought the New York district should he
large. but Henry II. Bizallion, president
Of the Gotham National. believed the area
should be limited to the metropolitan dis
trict OF the city.
Edward Townsend. president of the Inn
porters and Traders National. suggested
a capital for the New York bank OF from
900 TO 100000. He thought the
minimum nQnlDtI OF ltStlNc DdlIhH ttHA
but agreed with the point made by James
@. Cannon Monday that each of the MEM
Der banks should be within eighteen
hours by mail of its reserve centre.
j. Howard Cowperthwait. of the fur
niture house OF that name, advocated
reserve bank in this city. which would
have 20 per cent Of the banking power of
the entire country. n new sort of COM
mercial paper should be created, he
thought and Mr.. McAdoo told him that
this probably would follow.
Samuel Ludlow, jr, president of the
Union Trust Company Of New Jersey.
thought the New York bank should be re-
stricted in area and said that the reserve
bank here would probably need help il
largely taxed. Edward u. Page. Of HoI-
brook. Corey & Co, urged that men
familiar with local business conditions
and the source of the banks business
should be placed at the head of the re-
serve bank.