The Birmingham age-herald., 1914-02-14
MAX MAY LAUOS THE
NEW CURRENCY LAW
AS BUSINESS MAKER
Regarded as Greatest Ex-
pert i'm America on For
eign Exchange Matters
LAW OFFERS FIELD
FOR BIG EXPANSION
Expected to Create Situation Which
viii Call for Many Branch
Banks in South Ameri-
can Cities
~ HOLLAND


enthusiastically modest and unpedan-
tic way, Max MAY has been able to com
pact into a few paragraphs what he re-
| CARDS as the very great merits of the new
| banking and currency law Mr.. May is
probably better known by name in Bu-
| rope than in the United States Yet
there are many thousands who have had
occasion to buy or sell bills or exchange
who indirectly at least must have learned
| that the final authority which passed
upon their offerings. aggregating many
| hundred millions. was the vice president
OF one of the largest trust institutions In
! the world.
| The estimate was recently made that
Mr. May has now for some years handled
about one-third of the entire foreign ex-
change business of the United States. In
the year 1913 much the greater part of
the bills drawn against expectation of
cotton passed through Mr.. Mays hands
and were handled by the institution Of
which he was vice president.
The committees of both houses of Con-
gress, when considering the panKing and
currency bill could have obtained from
Mr. May better more detailed and more
i lation the foreign exchange business
| bears TO American banking. ana also to
international financing, than from any
other American authority, with perhaps
| two exceptions. The business of foreign
| exchange is a science and from one
point of view is also an art. 1t was the
| late j. p. Morgan's profound knowledge
| of the financial philosophy which UNDER
| lies foreign exchange which enabled him
| to compass many difficult undertake
| ings That was especially true at a time
| when he, almost literally with his back
| to the wall for six months met the de-
mands for treasury gold which the syn
dcate of which he was the head pledged
| itself to President Cleveland to protect
| for that time against Withdrawals from
| the treasury.
| When Mr.. May could have found the
| time to study the banking and currency
| bill he alone knows, but that he did make
a mastery study of it and chat this study
| justified him in saying to one of the
| leading bankers of France that the Amer
| lean banking and currency bill Is a long
step IN the right direction are made evi-
dent by a recent publication of his state
ment to that banker of Paris.
The One Chief Contingency
AS all of the other banking authorities
| of this country and some or Europe have
said, Mr.. May also intimates that the
chief contingency, the great test. depends
| upon the board of governors VINO Will di-
! rect the policy of the regional reserve
/ banks. James Simpson, chef director Of
one OF the largest of the banks of Great
| Britain, in an address delivered i'm this
/ city a few weeks ago, clearly intmated
| that the success or failure or the new
American banking law would in great
| measure depend upon the character and
| the ability of the board which. seated in
| Washington. will direct the regional re-
| serve banks If this board be free from
the temptations to make political use of
/ its power then the new system should
! go far toward the correction of the de-
| fects which were in the old system. Mr.
| May points out that chief among these
defects We're erratie. s1ipsnod and hap
| hazard methods, whereas under the new
! system the American natlonai banks can
| assume policies and methods which are
| in line with those characteristic of the
| leading European financial Institutions
Already some of those who are famil-
lar with conditions in South America
are persuaded that the new banking
and currency law, possibly aided by the
new tariff will create a situation In
South America which will soon Justify
the establishment of branch banks in
can nations.
A Bold Statement
| To this feature of the new law Mr..
May does not allude. But he has the
courage to say that the benefits which
this law will create for the United
States and the entire world will be very
great, although at first the new law
| will probably mean an impairment of
the prestige of Wall street, which, as
Mr. May says, "has heretofore stood
pre- eminent in American financial af-
| fai 10 Of w
who drafted the bill hope to secure.
| The courage of this statement is all
| the greater because the state chartered
| institutions of which Mr.. May is vice
lpresident is ranked among the most
| powerful of the financial authorities in
! the Wall street district. Apparently IL
| lis not to surrender its state charter and
lreorganize as a national bank. But pre-
sumably it is to accept the offer con-
tained in the new national banking law
so that ii may participate in the privi-
lleges of membership.
r Apparently Mr.. May is of the opinion
that the most important OF the benefits
which will follow the adoption Of this
new system is the utilization of COM
mercial assets as a basis for credit.
These will be used in place of bonds
| and stocks. thereby eliminating rigid
tity. There will be a liquid condition of
credit and an entirely healthful expan-
sion or contraction perfectly Sympa-
thetic with commercial conditions.
The Cost of Money
| Mr. May is persuaded, as apparently
| Frank A. Vanderlip and Jacob II.
Schiff were persuaded while this meas
ure was under consideration, that the
| banking machinery or appartus which
| will be perfected under the new law
| will make the price of money or the
| rates charged for lending it more uni
| form throughout the United States
than at any time in the past. Further
more, Mr.. May is convinced that one of
the earliest benefits following the in
stitution of the new system will be the
creation of a discount market in this
country which by and by will compare
very farvorably with similar markets
which have been established in the
leading financial centers of Europe.
Mr.. May is not one of those who fear
that the machinery of the new banks
and banking system will at any time
become clogged or overworked. That
was an apprehension which some bank
ers confessed to fear when the measure
was under consideration. For in Mr.
ideal method of cooperation. The banks
are connected with each other through
the medium of their own regional re-
serve banks. while the board at Wash
ington will control the various move
ments of these larger circles repre-
scented by the regional reserve banks in
such manner TO make the relations
between them smooth and systematic.