Norwich bulletin., 1914-08-13
SETTLEMENT OF coU.ITRYs
 INTERNATIONAL OBLIGATIONS. Radical Steps Proposed by New York 5ankers-SusPension of Reserve Re- quirements.

INGW IOTh, AuS. 4As-T lIlS 6Cll4C- ment of the country's international obligations radical steps were proposed today by New York bankers. One sus- gestion, which was laid immediately before the federal reserve board, was suspension of the provisions of the law regarding reserve requirements for ma tional banks. An alternative plan was enactment of legislation by congress permitting banks to count national notes in their reserves. In either case the result would be to lessen the amount of gold the banks must hold and enable them to ship gold from the country.
 Frank A. vanderlip. president of the National City bank, telephoned to Washington to Charles s. Hamlin, governor of the federal reserve board, presenting the suggestion that the re- serve requirements be suspended. If the board thought it feasible, and ask ed if it were possible to take such ac- ton at the present time, before the machinery created under the new law had been put into operation. Mr. Ham1in said, according to MT. Wander lip. that the matter would be brought before the board.
 These matters were brought up at a meeting of special committee of the New York chamber of commerce at- tended by MT. Vanderlip, J. P. Morgan, Jacob H. Schiff, E. H. Outerbridge and Seth Low and others. When news of the plans discussed by this committee reached the financial world fear was expressed that the result of any such action would be to start once more the drain on the country's gold supply. which was a leading cause of the re- cent unsettlement of the country's s however, felt there was no danger of such a result One interpretation placed upon the proposal to include bank notes in legal reserves was that it would mean the suspension of specie payment. MT. Vanderlip characterize ed this as entirely untrue.
 At the meeting today it was said that about $2. .0o0, 900 was immediately due European creditors. Members of the committee expressed the opinion that, whereas it has been recently im- possible to settle foreign obligations in gold, owing to the interruption of l transatlantic sailings and other condi- donS brought on by the war, gold pay ments were not possible, at least to English creditors. by reason. of the ar 1 rangement whereby Bank of England gold Is to be held in trust by the Canadian minister of finance at Otta- wa, thus obviating shipments across the Atlantic. There was no further reason, it was held, why obligations not covered by the moratorium in
 
 the bankers took the position that to refuse to make these payments in gold would be a reflection on the country's 5 integrity and would damage its credit abroad.
 MT. Vanderiip was asked to draw an amendment to the bank act. to be sub
 nitted to congress, enabling the banks to count bank notes as part of their reserves.
 After this proposal had been made it was suggested that such action might be unnecessary, since the federal e. serve act gives the board power to suspend the reserve requirements for 30 days, and longer if deemed advisa- ble. It was then decided to lay the whole matter before the board and Mir. Vanderifp was designated to act for the committee. Mir. Vanderlip said that | if bank notes should be used as part | of the reserves 1t was probable that only small percentage of the reserves say 10 per cent-would be thrs made up.
 The opinion was expressed in the | financial district tonight that any steps l looking toward the exportation of con- | siderable sums of gold would meet with strong opposition here. Bankers who favored the action said, however that | should the plan be adopted there would | be, in their opinion. no heavy exporta- ton of gold. since accommodating Eng | fish credits would be utilized for pay ment of American grain and other ex- ports
 Other developments of the day indi- catcd steady improvement in financial affairs.