Evening star., 1914-08-02
LIFT BARS AGAINST
FINANCIAL CRISIS
New York Bankers Start Re-
lief Measures to Preserve
Confidence.
EMERGENCY CURRENCY
SOON WILL BE ISSUED
Advance of $10o, ,000,00 Credit to
England to Be Suggested
to Wilson.

England to Be Suggested
to Wilson.
NEW YORK, August 1-Extraordinary
action was taken by the leading financial
interests of America today to avert finan-
cial unsettlement in this country as a
result Of the European war. Relief
measures are under way. which in the
opinion of bankers will preserve the
public confidence. This is the situation:
Emergency currency probably will be
put into circulation next week. If occa-
sion requires this currency issuance Of
which is provided for by the Aldrich-
Vreeland act passed after the 1907 panic
may be supplemented here and elsewhere
by clearing house certificates such as
were used in 1897.
Representatives of New York foreign
exchange houses left tonight for Wash
ington to hold Sunday conference with
President Wilson. They planned to sug-
sest the unprecedented procedure of ad-
vancing 500. 100000 credit to England
Bankers from the principal cities OF
the country arranged a meeting to be
4 plan of action.
Day Of Great Activity.
Ii was a day of strenuous activity, not
unmixed with anxiety. for the bankers
of New York The European crisis de-
moralized the financial markets of the
world a week ago. and the intricacies of
modern finances are such that upon
America. isolated from the perils Of war,
fell full share of the burden. Liquida-
ton of American stocks by European
holders not only upset this stock mar
ket so completely that it was compelled
10 suspend business. but raised another
serious problem. That problem was to
pay Europe for the stocks sold here.
1t is estimated by representatives Of
foreign stock exchange houses that from
500, 100000 to S15O.G0. GOO worth of Amer
lean stocks We're thrown on this market,
for whatever they would bring. by panic
stricken European holders. Canada also
unloaded stocks here to a large extent
Millions on Sea in Danger.
Next week the bills drawn against these
Of the s45OO0.6oO gold shipped abroad on
vessels now on high seas is in danger OF
capture. Even these shipments leave
fled: Today's statement of the New York
BANKS showed in cold print the effect of
tne rad upon the American supply of
gold. There was decrease in cash hold
inss OF more than $4,000. 900. due prin-
opaliy to the loss Of gold. and in place
OF the surplus reserves of S26, OaOi) re-
ported last Saturday there was today a
deficit of $17.0OOO0O
To meet these foreign claims without
serious encroachment upon available
financial resources. the bankers of New
1orK were forced to take decisive action
Uncertainty as to what developments
the upheaval in Europe and doubt as TO
the enect upon American public senti-
inent made 1t imperative in the opinion
OF bankers, that added precautions be
taken TO safeguard the situation
Bankers in Conference.
Early in the day there was a confer
ence OF some of the leading bankers of
New York Later there was a meeting
Of the National Currency Association OF
the city of New York, an organization
provided by the Aldrich- -vreeland law.
At this meeting arrangements were COM
pieted Tor issue Of emergency currency
next week. Detailed instructions were
given as to the manner in which this cur
rency might be obtained. When the meet
ing was called to order il had before 1t
applications for substantial amount of
national bank notes such as NAV be is
sued under the law.
Although the possibility of issuance of
emergency currency has been discussed
quietly in Wall street, the action of the
New York association gave the first
authoritative Endorsement to these re-
ports.
Vanderlip Makes Statement.
To give assurance tbat the ,,an- taken
would amply meet the needs Of the situa-
tion. and that there was no occasion for
apprehension. the following statement
was made tonight by Frank A. Wander
lip. president of the National City Bank:
The action of the New York Currency
Association in getting all the machinery
ready for the issue Of additional bank
notes should give assurance that there
will be no lack Of an ample circulating
medium. 1t Is now possible to create a
considerable amount of additional cur
rency that is absolutely secure and in
exactly the same form as the present ma
ttonal bank notes. 1t Is obvious that in
tion in Europe the demand for any addl-
tional circulation must be met from with
i'll ourselves.
This law offers a perfectly sound
lating notes. There need be little fear
therefore of any repetition of conditions
of 1907. when there was 50 much distress
through the inability OF banks to supply
a circulating medium. The banks of
the country under this law may take out
s5O0.0O0OO0 additional national bank
notes. There is no probability that any
thing like that amount win be needed.
or could be used. but the banks are in a
position to make their assets liquid and
to meet demands upon them in a per-
fectly satisfactory manner by increas-
ing their national bank notes under the
provisions of this act.
Gives Expanding Currency.
The act provides a true expanding
currency. and it is most fortunate under
all existing conditions that it is availa Die
for the national banking institutions OF
the country.
The Treasury is cooperating in every
way possible. 1t has been forehanded il
printing these notes In advance, so that
they are Immediately available. and the
door is open for the creation Of any rea
sonaDl. amount of perfectly sound cur
rency TO meet whatever legitimate de
,r'ands there may be for 4 circulating
medium.