The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-11-17

Return of Confidence

helufn VI AUntiutuCt
The new federal reserve system begins
operation at a moment when the return
OF confidence Is manifesting itself, and
that Is a condition which Is necessary II
We are to gain the prosperity which many
OF the leading minds now predict. This
confidence will early be reflected in the
experiences fthe regional banks. 1t
will justify them In such service as will
stimulate industry of all kinds.
Another feature which is to be assoc
ciated with the beginning of the new red
eral reserve system is the indication that
the regional bank which is now estab-
iished In New York city will almost auto
.matically. certainly inevitably. Demon
strate that under any reasonable banking
system New York city is and must De-
If the entire country is TO be well served
the financial heart of the nation. The re-
onal bank In this city under the admin
istration OF Benjamin Strong. Jr., and
Pierre Jay. subject as 1t is to the au-
thority of the federal reserve board at
Washington. is expected speediiy TO Do
occupied with heavy rediscounts OF com
mercal paper offered to 1t by regional
banks in other parts of the country The
regional bank of this city possesses the
largest resources of any of the regional
banks and is, moreover, likely to be in
position easily to meet the request of
re gional banks of other parts of the coun-
try for red'scounts, because the New
York city banks on the whole are not
likely to ask for rediscouuts. since by
rea son of the reduction of the amount
necessary to hold as legal reserve they
will be in possession of abundant re-
sources.
A few DAYS before the new reserve svs-
tern went into operation. intimations came
to the financial center that several of the
southern REGIONAL banks will seek reds-
counts of the reserve bank OF this city
as soon as possible after 1t Is open for
business.
Another Feature
Another feature associated In point OF
time with the opening of the reserve bank
of this reserve district Is the demonstra-
ton made of the strength OF New York
city banks. At the very moment when the
final details necessary for the smooth
working of the regional bank organlza-
ton of New York were being perfected.
the New York syndicate, made up of all
the banks of the city with two excep-
TONS deposited s15.00o,0 900 in gold with the
managers of the syndicate, who immedi-
ately sent it to Ottawa, Canada. This
amount made the total of gold exports to
Canada 54.500000. and there will be need
ed only about 100000 more in order to
provide the sum needed to nquidate New
York citys current obligations in Lon
don.
The moral effect created by the APP
parent ease with which the banks of New
York city have furnished nearly SIS. 600, 900
In gold within two months for export, to
be utilized for meeting New York city's
obligations. has been so great as partly to
explain the beginning of renewed conf
dence in international financial circles,
Moreover, the banks of New York have
subscribed to a considerable part of the
gold fund of $780, 600 600, in which all the
national banks in the United States par
ticipated. Yet these heavy obligations
seem not to have impaired, but in fact to
have strengthened, the banking situation
in this city.
New York also stands ready to contrib
ute $500O0,O00 to the contemplated cotton
pool of sl35,000,000, provided other parts
of the country furnish the sS5, 000, 600 need
ed to complete the pool. condition OF
that kind attaches to the promise of Pres
ident CASTOR of the Shawmut bank Of
Boston. Mr.. CASTOR announces that his
bank will contribute its proportionate part
| in case banks in other parts of the coun
| try do likewise. But just as the regiona
| banks begin business there come intima
| tons that possibly this cotton pool fund
will not be needed.
Senator Weeks Address
| The address delivered few days agt
| by United States Senator Weeks of Mas
! sachusetts TO a company of Influential
men of Boston has been subject of FIRE
| quent comment In this city. The especia
| thought In the address which has cniefl,
| occasioned this comment was his intima
| ton that he is strongly of the opinion
| that after reasonable experience with thu
operation of regional banks Congress ma,
] find 1t expedient to reduce the number
and ultimately to establish a central Oh
unified bank. In view of the fact tina
! Senator Weeks gave his cordial suppor
to the main features of the new law, thi.
| intimation from him that he believes tina
| ultimately 1t will be found expedient, i
| not vital. to the success of the system
| that a central bank be established is re
garded here as of all the more impor
I lance