Evening star., 1914-08-16
Unusual Conditions Resulting
From War Meet Drastic Ac-
ton by Street Traders.
NEW RESERVE BANK BOARD
GREAT SUSTAINING POWER
Continued Closing Of the Exchange
Hats Trade With Neutral Cen
ters-Private Trading.
BY w. s. COUSINS.

BY W. s. COUSINS.
NEW YORK, August 15.-The out
ward calm and confidence exhibited by
the leaders of banking and business
throughout the United States at this
time still perplex the public mind.
Not since 1871 has it become necessary
to close the doors Of the New York
Stock Exchange, while in money mar
kets precautionary measures hitherto
unknown to the banking community
have been resorted to in order to in
sure financial equilibrium. Clearing
house certificates are not novelty IN
banking adjudication, but the issuance
of emergency currency notes Is an IN
noyation that has been unfortunate,
though absolutely necessary. When the
Aldrich-vreeland emergency currency
law was placed on the statute books
1t was generally agreed that its pro-
visions covered an Impossible situa-
ton When the statute expired by lin
itation in June of this year 1t was
by some deemed inexpedient to renew
its lease of life, and only by speclai
effort was 1t continued. Even then the
conditions which it imposed upon banks
desiring extra currency were so awk-
ward and impossible of execution that
it was necessary to enact raoicai
amendatory changes to make II sur
fciently flexible to be of use.
bankers of the United States are facing
a crisis as grave and as serious as
that which paralyzed business In 1907:
on the other hand. it Is equally GER
tain that the skill and the energy with
which they are graphing with these
tremendous problems will prove suffi-
cient to tide us over the danger period
and finally bring order out OF chaos.
Due credit also must be given to our
Treasury officials at Washington. The
Secretary Of the Treasury and the con-
troller of the currency have been quick
to see their opportunity, and with
commendable alacrity have placed
whatever they might of the government
try. The confirmation and organiza-
ton of the federal reserve board. also,
has been a master stroke. and was the
initial step in the Inauguration OF
new system that should forever dispel
all fear of financial panic in this coun-
try.
Hopeful Sentiment Extant.
From a series of reports from
special correspondents in all the i'm
portant monetary centers we find
such a unanimity of favorable and
hopeful sentiment that 1t would
be useless to attempt to discriminate or
to classify according to location. The
underlying tone Is one Of confidence in
our own financial security; OF regret and
horror for the ravaging spectacle that
is devastating the countries OF Europe !;
and with the positive conviction that out
of the ruins and remains OF European
empires will rise new opportunity for
the propagation of American trade and
industry Already our South American
neighbors are calling us to step in the
breach made vacant by reason of Eu-
ropean belligerency, and to supply the
necessities which have hitherto come
from the peoples on the other side OF
the Atlantic
In New York the chief reason for re-
gret lies In the continued closing of the
stock exchange, and the tmporary pa
ralysis of practically every instrument OF
foreign exchange and foreign trade. The
former is of greatest personal impor-
tance to those whose means of livelihood
ere furnished by the exchange. and the
latter to business concerns all over the
United States having in any degree an
interest in our trade with Europe. THESE
are serious propositions, and not one day
should be lost in relieving their unfortu-
nate consequences.
Local financial conditions are salts
factory, and already credit is becoming
freer than it was week ago and ar
are under way looking to the reopening
of International credits in way. which
will facilitate the movement OF grain
and other merchandise. All sides of
the big problem of re-establlshlng
trade currents across the Atlantic are
being considered, and many forces are
CO. operating to this same end. The
British government is undertaking to
assume the war risks on grain ship
ments in English bottoms: the question
of opening the way to American regis
try OF foreign built ships has received
federal sanction, and bankers here are
laying their plans for the financing of
the shipments when they become phys
ically possible.
Exchange Clearing Up Business.
Meanwhile step by step the business
left unfinished when the stock ex-
change closed a week ago last Thurs
day is being cleared up. the stock ex-
change committees ruling regarding
the calling up of differences on borrow
ed stock being a step in this direction.
Some little exchange Is becoming avail
able at lower rates than the maximum
paid last week, and an important sign
is the larger purchases which are now
being made of commercial paper.
The banks, as last Saturdays clear
ing house statement showed. had to
call noaV1ly on IQelr reserves pFlucl--
pally to meet the gold outflow which
was In full swing up to week ago.
But this is a much less important mat
ter than 1t would be were it not for
the means now at the disposal Of the
banks to obtain bank notes against
their assets to satisfy the seasonal de-
mand for currency.
Ordinarily q rise In the grain market
would be accepted as rejecting condi-
tions unfavorable for the financial
markets, but this weeks further sharp
advance In wheat carried no such in
ference. That rise was due to the an
ticipation of the resumption of grain
shipments, and that is something which
will be distinctly helpful, not only in
this market, but also abroad. 1t would
help both the shippers and receivers
of grain and incidentally would provide
material use as cover for the obliga--
tions which We have to meet abroad
making remittance.
Market Quotations Discouraged.
A number of private trades were re-
ported In the Wall street district this
week at prices not varying very greatly
from the closing quotations of July 80,
which was the date of the last session
of the exchange. The stock exchange
Is not insisting upon a complete suspen-
other interests. as 1t is recognized that
there must of necessity be situations
where transactions are absolutely neces-
sary. However. the general ruling Is to
leave the necessity for transactions of
this character entirely to the honor of