The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-02-20
CHEER FROM THE WEST.

Editorial in the New York Times:
When Wall Street is blue it is often
advised to look to the west for fair
comes the CHEEKY circular of the Me
chanics' bank of st. Louis, which sum-
marizes the situation in a sentence i'm
possible Of misunderstanding, "the out
look is all right for better times The
bad times are behind. The country Is
sounder and stronger for having pres
pared, itself for, worse things, and
therefore is in a position to profit by
the improvement in sentiment upon the
perception that the strain has passed.
The president is curbing the horses in
congress, the pending legislation con-
talns some things that are desirable,
and Is being pruned Of what is undesir-
able. When the antitrust bills are
disposed Of, politics will take q back
seat while the crops are growing.
me nank Is even hopeful regarding
service to the community in marketing.
securities. The bank thinks that the
pubic IS becoming educated to their
see their activities crippled beyond
what Is necessary to correct their mis-
conduct, If any shall be proved. Final
~ Few people realize what genuine
throurby n Inc country Is making
vate economies" 1t is not necessary
Tor each. American to save hundreds to
co1Vert pad times into good. The saw
ing OF a few dollars apiece in the
course or a year would provide bank
reserves for credit on a scale OF multi
pies Of millions.
The supply Of bank credit promises
70 equal every demand without pinch
ing py anybody. According to the
nsures just published the central re-
serve cities hold 81 per cent of reserves
or y per cent more than the Federal
reserve system requires. The other re-
serve cJtjpG' hold Ok "A, ~@- --,,s
pc required to hold only Is per cent.
with a smaller proportion than now in
cash. The country banks hold nearly
hho,dp per cent, and will be required to
smaller proportion Of cash. Precise
statement is impossible, as the reserve
ngures are only for national banks. and
rnere Is not full knowledge of how
may affiliate with h new system.
moreover, there Is a variation In re-
quirement Of reserves according to the
nature Of the deposits. 1t was reck-
October condition that the banks had
$l86.000,000 more reserves than the new
system would require. The present
statement adds $92, 2s6, 966, which would
seem a super1uity of cash. -,
But there are offsets. The new svs-
tenn requires. large payments on canitaY
account, and there will be a ereat
transter or cash from the city to the
al tiIle OF such read
JustInents common prudence requires
al concerned to be liquid and strong.
ABOVE accustomed standards. IT does
nov follow that because reduction Of
reserves is lawful on a great scale
therefore 1t will be prudent. Even ar
the present time there is an excess Of
reserves Tor the country above the pre-
sent larger percentage of required re-
serves. Ihe surplus will not be un-
necessary the requirement ID
asouceu. On the contrary, the reduced
minimum" that is a to-
tai which when approached signals
need Tor caution by borrowers ana
lenders alike. Particularly will this he
the case since the system depends for
Its dement's upon the creating or q. re-
discount market, for a species OF com
merclai document which does not now
sAlst except in mere specimen quanti-
1t should NOT be forgotten that r,,ora
.tnan the banking system is to be re-
organized. The system OF cornmercisI
payments Is to be changed from fha
system OF sales on open AMI
bank credits upon statement OF borrow
ers condition, to payment In cononer-
claI paper available for r~ediscounf. .rTha
promised benefits are great and IL ia
hardly to be doubted that 1T viii he
availed of generally when available ana
nnderstood. It is an adventure into 3
PROMISING; country, but the lay Of the
land is known on1ySto the trayeIeS fanv
Inc bank reserves are ample enough 10
promise the most favorable condi}inpS
Tor the experiment., but The Hrsf al
illustrators may have ideas about fha
carrier reserves which differ from q
simple ejaculation of percentages.