Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-08-04
RESERVE SYSTEM TO
BE LAUNCHED AT ONCE
Mail Service With European
Counties Not to Be Seri-
ouSly Interfered With Dur
ing Progress Of War;

SuHlng from the European Crisis.
This new money backed by the
prime assets of the banks. may be Is
sued dnder a modification of the bank
law, passed In both house and senate.
then compromised in conference and
approved by the administration for fl
nal action in both houses tomorrow.
All national banks and all state
banks and trust companies, members
of the new federal reserve system, and
those which have agreed to Join. may
issue notes under the Aldrlch-Vree-
land section of the banking law. up to
125 per cent of their combined capital
and surplus
Vast sum Available.
There is approximately S1.760,0O0.-
900 such capital and surplus. upon
which issue OF notes may be based OF
that. about $S00.000.O00 invested in
government londs, is not available,
Approximately 5000, 600, 600, plus 20
per cent is therefore ready as the basis
of issue. Inasmueh as bankers point
ed out to administration leaders, is
sues of clearing house certificates in
this country never have exceeded
$500, 600. 900 in times OF most dire dis
tress. the issue available should more
than care for any situation.
The senate imposed further condi-
ton that the banks shall deposit with
the government against the new issue
a gold reserve of not less than per
cent, and that the new notes shall be
apportioned geographically. Banks in
the New York district, for instance,
may issue only a sum proportlonate
to 1876 per cent of their capital and
surplus. In that way the new crcula-
lion is expected to be distributed
throughout the country, caring for To-
'al banking needs and industries.
Removes Restriction.
As originally proposed by the SEN
ite, the banks might have issued up
10 the former limit OF five hundred
The house today removed
Ill restrictions as to amount. The sem
lte. thinking a limitation wise, amend |
ID the proposal to limit the issue to
combined capital and surplus and the |
Extra 25 per cent was added In con
erence as a compromise.
Hundreds of millions of new notes +
ire ready for the call of the banks; |
hipments to financial centers have +
,egun and the bureau Of engraving is
making more night and day
Further relief for the situation was
by the organization OF the I
ederal reserve board. Paul NJ. War
'urg's delayed confirmation was adj
-anced by his examination in the I
committee today and Chair
nan owen predicted a favorable re-
'ort and not more than three votes
gainst him in the senate.
President Wilson selected his pomi-
lee for the place Of Thomas u. Jones,
'ut will not disclose his identity until
he man accepts.
McAdoo Is Confident.
Secretary McAdoo returned late to-
ay from his SUNDAY night conference
With New York bankers, took up the
bread of financial developments and
nnounced that he had the utmost
Onfidence in the ability OF the gov
rnment and the banks to take care
I any situation which may arise. II
vas pointed out that the outflow Of
.merican gold TO Europe has stopped
nd that there can he little doubt that Il
.merican trade with Europe would
eel a normal and reassuring reaction
'ithin short time
1t seemed TO be the opinion here
nat the next few days will show I,
'hich Of the nations now at war Will I;
Dntrol the seas and that with that
uestion settled there is no reason to
ear that the American export trade :.
ill no be resumed to a large extent.
Conditions Are Hopeful
Mr.. McAdoo had a talk late today
18th Festus j. Wade, president OF the
t. Louis Clearing house association. ,
[r. Wade Is understood to have given !
that conditions in St Louis /,
nd contiguous territory were good
Treasury officials are making every ,
reparation 70 launch the federal re- :
,rve banking system as soon as the
mate confirmed two members of the
,serve board. The stage has been :
t where about the only move neces-
Try before formal opening of the re- y
rive banks in twelve cities is the |
aiming of three directors for each $
INK by the reserve board. the renting Q
proper quarters and employment Of q
e necessary clerical force.
The currency to be used In the new
stem has not been actually printed. Z
1t the designs have been submitted Y
Id are ready for approval and the a
tual work Of getting out the bills c
III require but a comparatively short u
ne. G
Orders restricting the amount Of a