The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-27
Ne4v York Bankers in Dark
on Federal Reserve Plans
Confusion Exists Concerning Steps Necessary to Change
Present System Into New One-Further lnstruc-
tions From Washington Awaited.
FAVOR EARLY OPENING; CREDIT sou EEZE UNLIKELY

Pierre Jay Federal reserve agent for
day that New York would do all IN Is
lower to cooperate with Secretary Me-
AOoo in getting the reserve banks open by
November 16. lie said that he considered
II could be done Bankers OF prominence
approved OF November 16 for tho OPEN
ing as preferable to November 30.
Despite the assurances Of the Federal
reserve authorities here that the institu-
don could DO got into working order by
the EARLIER date. there was a marked lack
OF J,nniteness in the minds OF number
OF leading bankers about what measures
the New York board purposed TO pursue
In doing II.
So far as could be learned among
bankers. the reserve bank board OF New
York. as well as the Federal Reserve
Board at Washington. has failed to give
sufficient instructions either in public
statement or private advice to the banks
regarding the exact measures to be fol-
lowed in transferring the national bank
ing system into tho Federal scheme.
Bankers express the need for immediate
and definite instructions from the heads
OF the system II was said IN one large
institution that though newspaper des-
for the first payment OF subscription to
capital stock OF the reserve banks. no
official notice to this effect has been re-
celved either from the Washington or the
New York reserve authorities.
The change to the new system IL not
feared by New York ms liable TO bring
about temporary restriction OF credit IA
cilitles 1t is held in important quarters
that the possible withdrawal by the out
OF town banks Of their balances Of re-
serves and other accounts kept in New
York will be more than counterbalanced
by the new resources put IN the hands Of
the New York institutions through the
reduction In reserve requirements that go
into effect.
1t is said, Furthermore. that credit re-
striction need not be feared, because the
reserve city and country banks will prob
ably not make large Withdrawals from
the central reserve cities
The marked reduction OF their own re-
serves provided In the reserve act, IL Is
expected will enable these institutions
also to make their payments OF capital
and reserve to the Federal reserve banks
out of the surplus of former reserve no
longer required.
factor OF prime importance In the
transition to the new system. as tending
to avoid any temporary squeeze In credit,
said bankers yesterday. Is the intention
on the part OF number Of large ins,tu-
llOUA mere u Hihho use VI inc hANNbuiN
facilities OF the new system Immediately
upon its opening on November Is by
taking commercial paper TO 1t for redis-
count.
Bankers here thought thar Secretary
McAdoo's estimate OF s4O0, 900. 600 as the
amount OF bank resources released by the
new system In reducing reserves WAS too
high. They regarded s275,000,000 as
more nearly correct
The prospect OF imitation as the result
Of the operation OF the new system when
It Is considered that there Is outstanding
approximately $500. 100000 Of emergency
currency, upon which new credit TO the
amount OF from s275.o00.O00 to $500, 000,-
600 Is to be piled, was much more in the
minds of bankers than fear OF undue re-
striction.
IL Is recognized that the emergency cur
rency will be gradually replaced by the
Federal reserve notes. but the lack OF any
definite measures to retire the emergency
issues before the new credits come into
play Is regarded as point OF weakness.
IL was reported unoiiicially yesterday
that the salary Of benjamin Strong Jr..
governor Of the New York bank. will be
10000. and that OF Pierre jay, agent,
SIG OOO