The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-29
Latest News From the Treasury

Nothing In the record warrants the
overconfideni tone which so frequently
cha racterizes Secretary McADoos ex.
pressed thoughts Oh banking conduct
the money market and the state Of
general business. Also his subordinate
the Comptroller OF the Currency. JOIN
SHELTON WILLIAMS, has not uttered
himself with 80 much freedom from
pre1udiced misconceptions as to justify
the assumption that the Treasury Is the
lnerrant custodian of the Ideas which
should control financial practice In prl-
vate as we'll as In public affairs.
The foregoing observations are In
spired by the latest developments NJ
Treasury contact with banking and
business conditions One of them Is
the position taken by the Comptroller
Of the Currency toward the Stock Ex-
change security values involved In bank
loans. The other Is Secretary Nc
ADoo's proclamation of November 10
as the date on which the Federal re-
serve banking system is to begin.
There will be two notions about the
stand taken by Comptroller WILLIAMS
respecting the loan value of securities
Once more the banks seem to he sub
jected to threat of Treasury proscrIp-
lion as In the matter OF the rate OF in
| terest TO which Mr. McADoo devoted
some spectacular attention n few week :
ago. The implication seems to be that
In NIB Aff Ial % h.,
resort to measures TO protect their re-
sources against the shrinkage of quota
lions for the collateral Hypothetical
with them.
Obviously tho Comptroler's office
does not take over the responsibility
devolving on the banks to safeguard lis
assets No Government guarantee
against loss goes with the instructions
to national bank examiners to recog
nize the quotations ruling for securities
on July 30, when the Stock Exchange
closed, ms the measure Of collateral
value. Nor can the Comptrollers exer-
else of discretion effect valorlzation
OF securities.
Nevertheless, the real intent of Treas,
ury policy indicated by the Comptroller
should be helpful at this iuncture. What
the Comptroller undoubtedly means to
do Ia TO assist the efforts made by lend
ers and borrowers to accommodate all
the strains resulting from the war
shock communicated To the financial
organization. Cooperation so far has
been very successful in easing strain,
and the Comptroler's present policy
directs desirable notice to the solid In
trinsic value which American securities
have Irrespective of their quoted value.
Even at the level OF closing prices on
the Stock Exchange on July 30 the aver
age of securities was far below their
long range worth. OGicial sanction for
tho trea of those quotations MS n
rea sonable measure Of value in stand
ing collateral loans will ha rdly induce
imprudence on the part of the banks,
1t may help them to adjust circum.
stances to the intrinsic worth OF col.
lateral and to the character Of the Dor.
rover without such exclusive reckoning
Of mere marketability Of securities as is
apt to be the case in ordinary times.
Mr.. McADoo's statement with refer.
ence to the opening OF the Federal re-
serve banks n fortnight before the re.
serve bank directors thought II could
be undertaken puts entirely too much
emphasis on the plight OF the Southern
cotton grower as the excuse for haste
and exaggerates the functions of the
Treasury in the financial field. Mr.