The Birmingham age-herald., 1914-09-14
Arrangement Has Quiet Sanction of Federal Re
 serve Board Members
ONE MERCANTILE
 FIRM OWES MILLION
Foreign Obligations Are All Good But American Concerns Were. Having Trouble In Raising
 Ready Money
By HOLLAND

New York, September 13.-(SpecfalD When the agreement is completed which will establish fund of s15o.Ooo,o 600 In gold the agreement itself and the gold which results from 1t will represent, in plain English. pool. The arrangements is a pooling agreement, the gold is the pool. Yet as the word ''pool' is not very well received, the 150,000.000 will be spoken of as a gold fund which has been collected for the purpose of fortifying American business credit and paving the way for a resumption of commercial relations with other countries.
 Although there was no official state ment that the federal reserve board at Washington was strongly disposed to ap- prove this pooling arrangement yet, early last week, there came strong intimaticns to the bankers of this city and probably to those of all the reserve cities that the federal board looked with favor upon the proposition.
 The agreement is the immediate result of the conference which was held at Washington on September 4 between the federal reserve board and committees which represented the federal reserve dis tricts of the United States. Each com mittee was able to report approximately . what the amount of indebtedness upon commercial transactions and banking transactions exclusive of any dealings in American securities of the United States to other nations. now is. These are valled existing obligations. It was learned, for instance, that one of the leading American mercantile houses now owes Europe about s1,Oo0000. The house has credit of the highest kind. It has re- sources in abundance But 1t has been un- able to make arrangements by which It could secure funds to pay its obliga- tions. It was also reported that many or the silk importing houses owe large sums to Great Britain or to the other nations of Europe and are unable to pay. not because they do not possess the resources but because financial impasse or dead lock exists
 The reports made by the committees which as a whole represented the 12 fed .eral reserve districts of the United States caused an estimate deemed reasonable, to be made that the aggregate of existing obligations. debt now due, in other words, was somewhere between sl5o,ooo.0Oo and SOC 0O0, GOO
 Exclusive Commercial Obligations
 These debts are exclusive of those ere ated by the sale of American securities That sale entails another problem, and attempts are now making for its solution That will come later however. The be- lief of the bankers and the business men as well as the members of the federal reserve board is unanimous that vigorous attempts should be made Immediately to break the deadlock which is impairing the ability of American merchants. manufac- turers and importers to meet promptly their foreign obligations.
 If from $150o00.000 to $200, 0,000000 be a fairly accurate estimate of the amount of existing commercial and trade obligations and some banking obligations owed by the United states to other nations. then it was presumed that if found of $15O.000O0O in gold could be subscribed it would provide the means by which these obligations could be met speedily, and that of itself would tend greatly to restore confidence and to stimulate renewed commercial ac- tivity.
 It was also the common belief at the conference at Washington that an un- dertaking of this kind should necessarily be national That is to say, all of the banks which are members of the federal reserve system are to be requested to pledge each it's proportionate share for . common fund of $l50,O00,00O in gold. As fast as the subscriptions are paid in they will be represented by certificates which. it is presumed, will bear interest at the rate of 6 per cent, an arrangement which will surely liquidate the pool when the occasion for it's existence is passed. Pos eibly not much of the fund may be called for.
 One hundred and fifty millions of gold is. relatively speaking. small amount for the banks which are members of the fed eral reserve system to raise. Yet 1t Is sum of such magnitude that 1t will un- doubtedly serve its great purpose when the pledge shave been secured.
 The executive management of this fund 1s to be under the eye of the New-Y0rk Clearing House association. Twenty-Five millions in gold will as soon as the fund is established be sent to Ottawa to the credit of the Bank of England. It is commonly believed here that none of this gold will go to England, and the time may not be distant when 1t will be re- turned through the ordinary channels of trade to the United States. That ship ment to Ottawa will leave $125 o.4A in gold. It is believed to be sufficient to yneef fhe needs of American merchants.