Evening star., 1914-09-25
many BANKS Of SOUTH
ON SECRETARYS LIST
Numerous Financial Institutions
Are Charged With Carrying Too
Large Reserves.
Conditions Compared - officials
Claim They Should Not Be Pun
ished for Conservatism.
By I. A. FLEMING.

~ is UNDERSTOOD that the list of ma
tional banks that will be made public
by Secretary McAdoo as carrying too
large reserves, and accused of not
doing their full share to care for the
business of their respective localities
In the emergency now existing, will
contain the titles of over eighty insti-
! tutions. The Secretary regrets inabil-
ity to review in like manner the state
and trust company banking systems.
There are two sides to this as there
are to all questions. Bankers have
never before faced such conditions as
exist today, either in the relations of
| the government with the banks of the
! country or in their relations with for
eign bankers. Never has a dollar OF
emergency money been issued before.
1t is century since the last worlds s
| war. and at that time the United States
| was one of the least among the big
/ nations of today.
The trouble of 1907 has been fire.
Quently referred to as Wall street
panic" The country banking fraternity
| largely recognized 1t as such. and, reai-
izing that they could not expect much
| aid from the great central reserve city,
nursed their reserves and were IN
state Of preparedness-indee some oil
them carried reserves of so to 10 per
cent-the while New York bankers
were paying a slight premium on god
| The deficit in the reserves or the cen
| trail reserve banks at that time-De-
cember 3, 19O7-was $32,597,69O. with
the country banks carrying surplus
of $113,752,000.
They could scarcely be blamed for their
! ultra conservatism. other than by their
talents, in order to be able to return
to their owners when demanded-not
exclusively the province of bank.
else would they charge for storage OF
funds for safekeeping.
But those were days in which the
banker with a good reserve could find
much self-satisfaction in the knowl-
edge that he was prepared, Tor the
public is and was finicky.
At that time the leaders OF New York
finance impol ltuned the Treasury De-
partment for aid. When 1t was finally
extended. it was accredited by many
now in political power as aiding stock
gambling:
backed by the full power of the admin
istration, is doing everything to re-
ieve pressure in any direction; TO re-
| lieve the south in its extremity re-
garding the cotton crop. ready for
market, but unstable because of for
eign conditions; to help in paying Of
foreign obligations, to move c.ops and
do everything possible to make money
cheap and abundant-one or the CA oi-
| nal objects also of the federal reserve
Law.
This Is different. Much. And while
| in this mood the Treasury Department
| objects strenuously to southern banks
| for the list is made up iaI geiy of
| banks from that section, being close
and conservative. .......,.
| From one point Of view the officials
| Of these banks were setting poor ex-
! ample, from another they were setting
| commendable one. By boarding their
cash they were putting on others obl-
| cations that they should have taken
part in relieving-they were In a man
ner encouraging boarding.
From another point of view they were
acting in the most conservative man.
generous action Of the Treasury would
be Forthcoming It is not in the record
| Of crisis periods Of the past that gen.
| erosity has marked Treasury opera
tions. II they had in mind conditions
| in 1907, when they were obliged large
| ly to look after themselves. they were
acting wisely.
Secretary McAdoo has the right. If he
will, to discriminate against banks, but
these strong bankers claim that there
| Is no reason why they should be held
up as culprits for going the law as to
reserve 8 several per cents better. Per
haps it should be for the customers OF
| these institutions who have been dis
| commoded by the ultra conservatism
| who should complain and seek more
| liberal treatment elsewhere.
Nor should there be a premium on the
| liberal banking policy that evades the
law in regard to legal reserves. any
! more than there should be a penalty
attached to the strict observance of the
laws requirements.
The controller of the currency crit
icises banks that permit reserves to
fell below legal reserves, and now the
Secretary Of the Treasury finds fault
with banks for being stronger even
than the national banking law re-
quires.