New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-01
SITUATION HERE
is WELL in HAND
Hepburn Calls Crisis an
international Govern
mem Panic"
KEEP YOUR HEADS"
SAYS J. p. MORGAN
Closing of Stock Exchange Cen
orally Commended as a Pre-
stationary Measure.

Admitting that financial conditions IN
this country and abroad are unprece-
dented as a result Of the European war
scare. leading New York bankers main
tanned yesterday that the situation here
is we'll in hand and cautioned Ameri-
can security holders not to lose their
heads. A. Barton Hepburn character
lied the present state of affairs as an
international government panic"
II was predicted that the Clearing
House statement 20 be issued to-day
will show reserves Of some OF the New
York banks below their legal require
ments, but it was stated that this was
due 70 the peculiar conditions resulting
from the closing of the Stock Exchange
and the heavy shipments of gold TINS
week
"Our market is only affected so far
as the possibility of European liquidl-
ton is concerned" added Mr.. Hepburn,
who is chairman Of the board OF direc-
tors of the Chase National Bank. 1t
is not a situation involving a banking
and money panic on this side, and TO
this extent there is no pressing occa-
sion for bankers to take action. we
can only prevent Europe from taxing
our gold partially by closing the STOCK
Exchange.
Regarding the money market there
is no occasio to feel alarmed, because
the country has ready the machinery
for an issue of $500,000,0O0 emergency
currency, which the new currency law
has extended for another year, and can
be obtained now. if necessary, at . per
cent, instead OF 8 per cent, as originally
devised.
"The primary cause for closing the
Stock Exchange yesterday was to stop
the drain Of gold from this country.
Foreign credits had been greatly re-
duccd. so they started to dump their
securities in this market, thereby get
ting more gold. 1t was time to stop
this. The government was powerless,
the banks could not do anything, and
the only thing left was to close the eX-
change.
Loans Not Called In.
Business should go along in an or
DERBY way. except that there will be less
business in the financial district. The
banks. of course. will be kept busy Tor
a dav or so while commitments of the
last few days are being adjusted.
lnplG is NOW ITO OlilIldi NdiA hiOt'N@
rate, but the banks are not calling IN
their loans. Some have been paid vol
unfairly, and more payments may be
asked, but the banks won't press Tor
payment where the borrower needs
help.
"There is no reason why this situa-
ton should affect mercantile lines. VI
course, there may be a slowing down.
and it would be foolish for any one
to make large commitments for the
future under the circumstances. see
no reason for any great alarm
J. p. Morgan said that while the
gravity of the present situation can
hardly be exaggerated, there is still
opportunity for the sober second
thought Of the people of Europe to
prevail over their first impulses.
"If the delicate situation can be held
in allegiance for few days" Mr.. Nor
gan added, 81 should expect a rising
tide of protest from the people who
are to pay for war with their blood
and their property.
"The situation Of the American Sc
curity market during the last two days
has been a splendid illustration of the
inherent soundness of financial condi-
tions in this country. While We all
earnestly hoped that the New York
Stock Exchange might be kept open,
the situation is fraught with so much
uncertainty that it seemed necessary
in the interest Of the whole country
TO close the exchange.
at is essentially a time for the own
ers of American securities to keep their
II IL. IL a
properties represented by American
securities will not suffer greatly BY q
European war. During the last few
days the American people have been
buying back American securities at low
prices. Presumably they will pay for
these securities with their wheat ana
other products at high prices.
VIII Hurt Americans.
at is idle to say that America y i'll
not be hurt by general European war
The wholesale waste Of capital involve
in such a catastrophe would result IN
a distribution of losses the world over
but the loss here would be infinitesimal
compared with the losses TO the coun-
tries Immediately involved. There is
no doubt that the whole American PEG
pie will cooperate to restore normal
conditions throughout this country AT
the earliest possible moment"
Max May, vice-president and head Of
the foreign exchange department OF
the Guaranty Trust Company, said that
the representatives of the biggest for.
eign banks are now trying TO sell New
York City warrants to bankers here
in view of the closing CT the Stock Elk
change. which has stopped the liquida.
ton of listed securities from abroad
and has materially lessened the prob.
ability of further heavy gold exports
The banks here, he stated, are refus.
ing to purchase the city's revenue bills
to prevent the establishment of add.
tional European credits in this coun-
try.
at is impossible to foresee the eff
feet of general European war;" Mr.
May added, because the interests OF
the United States are now so closely
linked with those of Europe"
With other bankers, Mr.. May said
the only way to stop the present enor.
nous gold shipments was for the
American bankers to agree TO refuse %
send gold abroad only where it was alb.
solutely necessary TO fulfil our obi
cations.
Francis L. Hine. president Of this
First National Bank, approved the
closing of the Stock Exchange as :
precautionary measure. He thought
there would be no more failures 81
brokerage firms and said that the posi-.
ton of the banks was sound.
The following cable message was Ie
ceived by an important banking firm
from Holland yesterday afternoon:
"A law has been passed that thc
House Of Representatives and the Sen.
ate allow the Bank Of the Netherland,
10 reduce it's gold reserve against bans
notes from 40 per cent 70 20 per cent
which means that they will be enabled
to issue an additional 5O0,OOO,00C
guilders $500 coo. 900 American money
Of hank notes, of which part will be