Daily capital journal. (Salem, Oregon) 1903-1919, 1914-08-26
HENRY CLEW'S WEEKLY
FINANCIAL LETTER

New York, Aug. 22.-Gradually but
surely business of all kinds IS Deing
resumed and the worlds commerce is
adjusting itself to necessities OF war.
BY far the greatest and most important
basis of Improvement has been the par
tial restoration of International trade.
Traffic is now practically safe across
the Atlantic and through the Mediter-
lrahean, two channels through which
much the largest snare of the world
commerce travels. The route to South
sAf.ita is also practically open. German
boats, representing an enormous ton
mage, are Of course out Of employment,
and the sudden withdrawal of so large
capacity must continue to be a serious
Inconvenience The loss of tonnage will
fall most severely upon the passenger
service, but this class of traffic prom
ises to- be exceedingly light for at least
a year or so to come. fortunately
freight transportation is being rapidly
resumed; chartering has become much
more active, and very soon our wheat
and cotton will be going abroad in lib
, eral quantities. Germany will not be
! able to buy our grain or cotton with
any freedom; but England must have
both in large amounts and viii be able
I to secure them as long as she can CON
y troll the sea. This helps matters very
n materially on this side of the Atlantic,
J. and will lessen or avert the loss that
I threatened our southern and western
/ farmers by an embargo upon tranatlan'
S tic routes. The proposal of our govern,
d ment to buy large foreign fleet OF
p merchant vessels is now unnecessary
IS 1t is unwise for both political and com
d mercial reasons. Our government woult
n be entering upon an exceedingly costl,
and losing operation tor the purpos'
of meeting temporary emergenc,
which is rapidly passing away.
Considering the abnormal condition
DO which have prevailed since the Euro
DO pean nations became engaged in a deaf
DO struggle, the banking interests through
O0f out the country have handled their al
Sc fairs remarkably well; nevertheless,
OO goes without saying that the banks ar
sc under q severe strain to provide 10
Sc the legitimate wants of their custom
90 ers and every measure calculated to n
fheve the situation should be resorte
Be to. In about two months time it
5e understood that the federal bankin
&c system will be in operation. 1t snoul
be started in a much shorter time,
l2c possible, for the simple reason thi
g. when this becomes a fact the nati0n
I4c banks throughout the country will
permitted to reduce their reserve 7
l6p nm aautc % III IA
g5e estimated that the deposits of count
19c banks amounted to about $2.6000O
&c Under the new law the reserve on the
tac deposits will be reduced from Is to
zoe per cent, which win release $4,000, ,0t
l5c Tae deposits of national banks in j
serve cities are placed at around s
&c U0O 100000. Under the new law t
1$l reserve will be reduced from 25 to
Zoe per cent, which will further relea
S2OOD000,000. Deposits of natioI
banks in central reserve cities are, 81
sl,000,00o,000; the reserve requiremel
- of these banks will be reduced from
cts. to is per cent, which means an ad
G. tional reduction in reserves of 81
.sts oOO,0O0. From these figures it viii
seen that the total amount to be Il
-sts released to the national banks un'
the law will be $3g0,0O0,00O II tn
ever was justifiable occasion in
financial affairs of this country wa
called for prompt action it is proba
ps now. To my mind, therefore, it we
undoubtedly be wise IL some me-
IA could be found to put in operation &
part Of the law which would permit
os;n a reduction in reserve requirements
re- tne national banks. This would
''''4 tainly put the country on an easier
"a more comfortable financial footing Il
'"u any other plan that could be at pres
devised, besides enabling the banks