New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-14
FINANCIAL RECORD
HERE And ABROAD
Bankers Against Proposal
10 Use Bank Notes for
Bank Reserves.

Wall Streets interest yesterday CEN
80 IN the reception given TO the pro-
,.esl made late on Wednesday to the
t,3cgsl Reserve Board, at Washington.
.bst either legislation be passed or the
hoard exercise what power 10 might
tsve 10 permit the national banks 20
.on-t national bank notes as part Of
.trir reserve against deposits in lien
IN specie or legal tenders. Though the
nisn was sponsored by banker of
rrorinence, 10 met with overwhelming
Esenproval. Mr.. Schif, az the Chamber
IA commerce meeting, was earnest IN
tis rlea that the United States pay her
5ebfs 10 Europe i'm the gold with which
iii Intimate balances between -hc ma
Sons must be met, and he suggested,
apparently as an amendment 20 the
rsrlicr proposal, that 10 should be the
t-utt companies who should relinQuish
some OF their gold for the purpose.
The Federal Reserve Board let u be
l-ouu carly In the day that whatever
81, might think Of the proposal TO
change tho reserve requirements OF the
national banks, il had no power to act.
BANKERS here made It known even more
forcibly that they would not counte-
nance The plan. As one Of them pointed
of national banks, and not assets, and
to attempt 20 supplant metallic re-
serves or their equivalent, legal tenders
and cold certificates. with them would
be only TO secure promises to pay with
other promises TO pay. The inevitable
result would be a premium on gold.
Not an the bankers IN the financial
district arc in agreement as 10 the need
of having our European deots In gold
1r fact. there is a considerable contro-
,crsv going on over the question
whether the state Of war that exists IN
Furope and which has made unsafe the
transportation Of gold across the ocean
does not automatically postpone the
settlement Of debts. even though the
moratorium in London does not cover
all obligations. But it is not so much
tho danger and cost Of transportation
be the feeling that with the currency OF
The United States greatly expanded no
more GOLD should 60 out of the country
that is really the cause Of opposition.
Ii is plain from the daily discussions
among bankers that 2 situation OF so
many complexities and no precedents
Tor guidance has developed proDlems
that will take much reelection, and so
considerable time, 20 settle satislsc-
ana
banking houses have taken consider
ehle Losses in their transactions with
Furcpe solely because they stood by
Inc letter as well as the spirit OF their
contracts. and they stand ready 10 take
more. If need be, in the protection OF
fheir financial honor as well as that OF
the United States as q whole. Ihey ave
confronted by the difficulty OF meeting
their engagements in the only medium
+be+ Is entirely satisfactory TO their
foreign correspondents-g old-WlthouV
doing anything TO impair the strength
III the financial situation within their
o~-r country. Fortunately, the ar
,.sDrement Of credits that IS being
-,.do between the central banks OF
rnoIand and France and some Amen
ran banking houses is mitigating the
trouble. The time is already IN sign I
when credits Of Europe and GREATS OF
the United States provided gram can
20 forward can be so matched against
each other on both sides OF the water
es 10 REQUIRE the sending back ana
forth OF very little gold, compaaratlVely
eDcaking. u seems lnevitaDle' hoWeSei'
t,.~,,se there are obligations about 20
nature abroad which must De met III
cold and which cannot wait.
ovteide the controversy over the
-..,-roents 20 Europe, very little deVel-
oncd Yesterday Of financial Importance
nc shin registry bill, which rs aeII
ro,dod upon TO supply the Oh''eg
~ta+s- with merchant marine, passed.
crt If conference into conslderaIioh
L.. tbc Senate and the House. To-day
~ ,,,,,,bcr of bankers and shipping. men
an confer with the Secretary OF the
rroasurv i'm the hope OF finding a sol1,
ION for the problem that underhes an
,.ters-tbe opening up Of the Atlantic
10 export trade, -,.,...4.+.-
Tho Bank of England's weekly state
,,ert. showing some substanual recoI
,rics i'm bullion and I'm reserves noV-
,vithstanding q large increase III IA
h,lifies. was less interesting only thah
ne British governments announce
nert that IL would guarantee the bahA
,rsinst loss in discOunting bills OF eN-
eEsnre either for home or foreign
.~sda which had been accepted prior 70
Au0ust I. The Bank gained E5,0oo,OVV
IL. ~cservc. but "other deposits, ma
tlitv increased e26, $780, 600. The pro
,,rtiop Of reserve 20 liabilities, now
,,or. now stands at II per cent, against
as $50 last week, and the Bank got sooo;-
600 additional gold yesterday, OF when
sbout half was American eagles.
There Was slightly more activity III
foreign exchange at lower prices, some
t~snsactions IN demand sterling. occur
ring az 4.95, with cables slightly over
g5 Paris checks were quoted at DIV