The Birmingham age-herald., 1914-09-24
Will Demonstrate Value of Quick Mobilization of
 Gold Resources
WHEN WILL STOCK
 EXCHANGE BE OPEN
Question Hangs On Ability of United States to Absorb Foreign Hold ings Which Are Sure to
 Be Offered
By HOLLAND

New York, September S-tSpecial) )-So many of the inquiries are made by those who profess to be interested in the propo- sition that the national banks of the United States subscribe to a gold fund of sl50,000, 900. each bank in proportion to it's resources and reserve, as to make it cer tain that the plan, even though vaguely outlined, has become matter of wide spread discussion. In this column report has been made of the purpose underlying the proposition. namely, that fund be underwritten by the national banks sui fciently large to make it possible for merchants, traders and men of commerce in the United States to meet their foreign indebtedness. The plan would provide means by which these merchants and manufacturers and importers could utilize their credit and resources so as to obtain the funds with which to meet their obliga- tions.
 But there is another point of view which should be taken by the public. That is one which reveals not the purpose of the proposition, but the asons for the necessity for working out a plan of this kind.
 A and for time a sort of moratorium was Inevitably established in the United States. 1t became evident to men of finance, as well as to the administration at Wash ington, that since the federal reserve sys- tenn has been organized there was no means by which there could be concen- tration and mobility of banking resources in the United States. Had there been unified bank, or, to call it by name by which it would better be understood, a central bank, it would have been possible instantly to concentrate resources and to mobilize them. The federal reserve board, although it has been organized, has no legal authority to do this since the reserve system itself has not been perfected. In no other way could the resources and the reserves of the banks be concen- trated and mobilized than through yolun- tary action. It has been deemed vital. however, that before voluntary action of this kind be taken it should receive the moral support of the federal reserve board.
 A Preliminary Undertaking
 To underwrite gold fund of S1o0, 000O0, to which every national bank would sub scribe, and to place that fund under the moral control of the federal reserve board while giving to a highly competent com mittee authority for the disposition of. this fund, are to accomplish by voluntary action what the federal reserve bank or a unified bank could do if such authority were in existence. To the extent of s150- 000O00 in gold resources could be sent in- stantly to any part of the country where there was special need of them. If for instance, it was discovered that the mer- chants and manufacturers of Minneapolis or Atlanta or Birmingham or Cincinnati were in need of gold with which to facili- tate their trade movements. then that gold could be withdrawn from the fund and shipped to any of those cities. The tele- graph and the facilities for swift sending of funds to any part of the country would make available instantly such part ot this general underwriting of $150,000000 as was needed. The proposition which would be adopted and its merit demon strated would teach the country how inn portant it is that there be some central authority which has the power to concen- trate and mobilize credit resources and reserves.
 The Chief Question
 From all parts of the United States there come to New York every day in- quires relating to the opening of the stock exchange. This, however, is 8 prop osition involving questions far different from those associated with the national
 
 iii gold for the purpose of concentrating and mobilizing credit and resources.
 At q recent conference between the fed eral reserve board and committees which as a whole represented the 12 regional re- serve districts of the United States an estimate was made, according to informal reports which have reached this city. that the sale of American securities which was occasioned by the outbreak of war in
  exchange was closed aggregated about $l30,000000. It was inexpedient to open the stock exchange until there had been some settlement of the obligations thus en- tailed. A sentiment of that kind has been carefully considered by bankers and one proposition was that an underwriting syn dicate be organized for the purpose of lifting the burden of carrying these se- curities from the individuals upon whom that obligation rested, some of whom had been staggering under the load