New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-14
Suspend Specie Payments
Before Catering to Eng
land Official Attitude.
DEMOCRATS FEAR
LOSING GERMAN VOTE
Plan Presented In Washington
in Behalf of New York
Association.
Lon Ia rrIbun. Rureau.I

lfrom me Irlhune Bureau
Washington, Aug. 13.-H. 4. Ed
ridge, vice-presdent of the National
City Bank of New York, who is here as
the representative of the Association
of National Banks Of New York, con
ferred with the Secretary Of the Treas
ury, the Controller Of the Currency and
members Of the Federal Reserve Board
to-day regarding the recommendation
Of the New York bankers that they be
permitted by law or otherwise TO in
clude national banknotes in their re-
serves in lieu of gold, gold certificates
or legal tender notes. Mr. Eldrldge
submitted drafts of two measures, one
permitting the inclusion of national
banknotes, the other authorizing the
Federal Reserve Board to suspend the
reserve requirements when financial
conditions warranted. No decision was
reached by the federal officials.
The officials showed opposition TO the
proposals, but they had no suggestions
to make regarding the dilemma IN
which the banks found themselves.
Mr.. Eldridge told the officials that the
New York banks were SAG, 100000 short
of their legal reserves on Saturday and
probably would be still further short
next Saturday. He said the question
which confronted the bankers and the
government was whether the United
States was prepared to suspend specie
payments or take such steps as we're
made necessary by the European stu
alton. lie explained that the establish
ment of a branch Of the Bank of Eng
land in Ottawa, the existence OF large
English credits in this country and the
demand of the creditors for gold to be
shipped to the Ottawa branch made 1T
imperative that the national banks still
further diminish their supply OF gold
and gold certificates, and he asked the
Treasury officials what they proposed
to do about il.
Loans in Violation of Law.
Mr.. Eldridge called attention 10 the
infexible character Of the administra-
ton of the present Controller and the
unwillingness of the banks to put them
selves at his mercy by making loans
I'm violation of the law, when their re-
serves were depleted. He declared, how
ever. that refusal of the banks to make
loans and thus TO protect their CUSTOM
ers would mean financial disaster.
1t seems probable that bill follow
ing the line of one or other OF those
proposed by the bankers will be sub
mitted TO Congress, but is is expected
that il will meet with considerable OPP
position.
A number Of the Democratic leaders
are opposed TO sending any more gold
out of the country, irrespective OF the
obligations of the nation, and would
rather suspend specie payments than,
as they express il, "cater TO England.
The officials of the administration adj
nit the logic of Mr.. Eldridge's reason
ing. but they are loath to to be put IN
the position of favoring England, es-
pecially as some of them fear such a
course might cost the Democratic party
the German vote in this country, and
might even cause complications with
Germany.
That the administration regards the
situation as extremely grave and as
one the least said about the better IS
obvious and the officials of the Treas
ury Department are doing all in their
power to minimize the reports IN the
public press. going even TO the extent
Of denying well known facts.
TOLD supply 10 De uudiu eu'
The impression appeared to prevail
among the Democratic members OF the
Senate Banking and Currency Commit
tee to-day that the United States could
not afford TO permit its gold supply to
be drained by any European country:
"As a neighborly act we might lie:
England have 100000, 600" said Sena-
tor Owen, chairman of the committee.
at would be folly for US 70 pay out
gold without limit, when other coun-
tries have practically suspended the
payment Of gold. We could give Eng
land 100000, 900 without relaxing the
requirements regarding bank reserves.
To give more might arouse the animos-
ity Of Germany. The statement that
we agreed 10 pay foreign countries in
gold is not altogether true. We ex-
tended credit, it is true, at time when
gold could be obtained for it, but those
conditions do not prevail now, and 1t
is not fair TO expect us TO pay in gold
any Indebtedness incurred under those
conditions. The United States Will
first suspend specie payments"
Mr.. Owens statement that the United
States can pay out s100,000,000 gold
without relieving the banks of the
present reserve requirements is re-
ao;,.od NTH ekepticisr, bv the bankers