The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-29
BOUND TO BE INITIATION.
Hut Banker says Release of Re-
serves VIII Help Country.

y banker OF international prominence
said yesterday that without doubt the
effect OF the Federal reserve bank sys-
tenn IN releasing from s275,O0O, 900 to
NOO,OOO,000 OF reserves as new credit
basis, will be imitation.
such imitation as may be brought about
however. he believed, Is not only war
ranted by the conditions of the country,
hut II necessary and desirable in the pres
ent drain upon the financial resources OF
the world. requiring the United States
for the present at least TO 20 II alone
in financing It's needs
The leading bankers OF the country, IN
the opinion OF this man. can look upon
the prospect OF imitation without anxiety
or fear. because the new credits brought
into operation will be under the control
or body Of men in the Federal Reserve
Board In whom the most prominent bank
egs In New York have strong confidence.
II is estimated that the new credits
established on the basis OF the released
reserves will amount to between $780,
100000 and $1,000. 000. 900 II the released
reserves ar" only the minimum figure
estimated OF $3.50. OO00 900
The necessity for such imitation, II was
pointed out. is that great volume OF
capital from Europe, relied on In normal
times TO supply the enormous needs for
new financing of the great corpora tons
mere. IL now smut on. Inc United STATES
will have to make good this lack from
It's own financial resources. These have
already been reduced by the various gold
pools formed. Without the aid of the
new credits available. II Is considered
by this banker os gravely doubtful
whether the ordinary normal course OF
business. manufacture, railroad and the
entire industrial activity OF the country
could be financed, In addition, the coun-
has In NnanTA tha growing fOrpi
trade which the future promises big.
The availability Of the new credit will
not mean that railroads and Industrial
corporations will begin new enterprises
and large development. This will be
restrained by bankers and the Federal
Reserve Board.
Il ls recognized by this banker that
imitation ~ any kind. warranted or not.
must ultimately be paid for. II IL felt
that tho distribution OF the new credit
available Will be such that when the time
IL due and world conditions have been
brought toward normal those enterprises
which have been the benehciares OF the
imitation will have produced results In
trade and actual business which will have
enabled them TO take up their IN
debtedness.
The wants OF legitimate business only
will be cared for through the new credits
released by the Federal reserve system,
said this banker. Land and security
speculation and other forms OF financial
indulgence will be effectually prevented
The railroads are IN the market for
great sums of money for actual require
ments as soon as there Is an intimatior
that business has turned. Their require
ments will have to be met out OF the new
supplies Of credits available,
Business In the country. II was said, 4
now In the delicate position where d
revival depends on the turning OF a hand
IL Is recognized that President Wilson
favors business construction. II bushes,
turns for the better. all the new credits
available will be called into use. Cole
/ exports are not feared by reason of d
possible plethora Cf money and credi
| under the new system, as II IL held that
! the current balance of trade. not reckon
! ing on sales OF securities by Europe, will
continue in favor Of this country
The directors OF the Federal Reserve
Board met yesterday in conference whiof
| lasted the greater part OF tho day Al II,
| conclusion II was said that bylaws an6
a seal had been adopted but that election,
/ OF further officials had not been held.
1t was pointed out yesterday that th'
Comptroller's statement OF reserves re
| leased showed that New York was chi
| only great city OF tho country which hat
lent 80 freely during tho crisis that Ia
reserves were below requirements. New
York was s24.0o0.ooo below, Chicago
s25. 900 above.