The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-07
FINANCIERS URGE Big
RESERVE BANK HERE
Tell Secretaries McAdoo and
Houston Needs Of City TN
der New System.
MORGAN OUTLINES PLAN
suggests Seven Reserve Cen
tres. With New YOrk's
the Greatest. a
MORGAN OUTLINES PLAN


under the Federal reserve system was
considered at the hearings before secre-
,ares McAdoo and Houston yesterday.
Testimony was heard to determine
whether the Federal reserve bank OF
This district IL TO be one OF outstanding
strength or one OF equal resources wirh
the other reserve banks.
l. T. Morgan urged tho importance of
r-.auinence for the reserve institution
at New York on the ground of inter-
national position.
THE essential matter" he said, us
that one OF the banks should be in
New York and should have so large an
amount of capital that II would COM
mnnd the respect OF European banks Of
similar character and be able to work
with them.
III the Federal reserve board can
show TO the people of this country that
this is "A system which IL IA unit though
operating in several parts. then Europe
will feel that it is dealing with the entire
system when it is dealing with any one
bank II Is not the amount of capital
OF the New York reserve bank that
would obtain recognition abroad. The
resources OF the bank are the most i'm
portant question
Morgan Suggests seven Banks.
When asked his ideas on desirable To-
cations for the reserve banks Mr.. Morgan
said:
II suppose there will be one In New
York and one in Washington, where no
doubt ia. headquarters OF the board Will
BE- located. SO that 1t can have strings
ON all the banks In the United States.
believe that there should be three banks
on the Atlantic seaboard-New York.
Washington and Atlanta, | believe. being
the desirable cities However. you might
even heave headquarters ct one bank ~
New York with "A branch in Boston.
Three other banks should he in the
middle section OF the country, with Dem
yer the Western boundary of the section.
would propose one on the Pacific coast
at san Francisco. That makes seven.
do not think eight reserve cities are
necessary.
Til. testimony OF two foreign exchange
Ard banking EXPERTS gave the most ilu-
nlnating Information thus far offered oi
Il. Importance OF New York in the inter
national situation.
Henry Goldman OF Goldman, sachs 4
Co. took the position that II big bank
@ dominant strength and resources IN
Now York is absolutely essential II the
Iui,,d states Is TO attain th1 position i:
the foreign market for bills. tapcr. &C
,..t aces md general discounts that the
currency law designed to give it.
Jests About Gold ExpOrts.
Ma MAY. vice-presiGent OF the Guar
ar'y Trust Company, in charge or the
foreign exchange business of the COM
,lry. g,rongly emphasized the Importance
{ 81 big reserve bank ut New York IN
order 80 give tn" new system standing IN
T.. .ses u: Europe. He added. however,
IN rcspous" 10 quest ons by the NO
p.cr''.ri"s tH.t moderate sized banks
instead Of one pr"douiuaing haut at
New York would al sv,r the purpose TO
tl. extent tAlt fUrciEn bankers would
recognize that they Were parts OF "a com
pctr system.
Mr. Mac opinion carried much weish.
because hr had just testified that the
Guaranty company handled bills of a.
change agsr,cJt!ug s2.363,0Oo.oOO last
year.
MIR. MAY said that the Federal reserve
bank to control the money market must
control the gold movement He recognized
that the Federal Reserve Board would
have power TO control this gold move
ment by influencing interest rates. In
Europe, he said. the big central banks
often induce individual bankers not 10
export gold He thought the Federal Re-
serve Board here might exert some sucl,
influence here. Mr.. McAdoo asked how
bankers here in the past have stopped
exports OF gold.
I'VE stopped them only after the gold
had gone" replied Mr. May. We locked
the door after the COW had been stolen
Others Crge Mig Bank Here.
Irving T. Bush. president Of the Bush
Terminal Compan. and chairman OF the
currency committee OF the Merchants As
ISOLATION, declared that New York should
be the seat Of a reserve bank Of pre-
rondernting resources because OF trade re-
'atlons. He advocated district for II
from Maine to Maryland and west to g
lire from Buffalo to Maryland.
The testimony Of Edward t. Page
representing the transit committee Of tho
Merchants Association. was more to the
liking of Secretaries McAdoo and Hous
ton. He advocated reserve banks in com
mercal centres that those in contrO
could know intimately the character o
the men making the paper for discount
lIo favored banks Of moderate and equa
size.
Gates W. McGarrah, president of tn,
Mechanics and Metals Bank. wanted 9
big bank for New York.
Lewis w. Clark, president Of thu
American Exchange National Bank, gav'
as his selection for reserve cities New
York, Richmond or Washington, Atlanta
Houston or New Orleans. Chicago. ST
louis, Omaha OF Denver and San Fran
cisco.
Hearings will DO resumed at 10 81,
o'clock tomorrow at the Chamber q
Commerce.