New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-07
BANK HERE MUST Be
STRONC-MORCAN
Atlantic SeabOard Should
Have at Least Three,
Financier Suggests.
LOCAL INSTITUTION
MUST HAVE RESPECT
Banker Sees Good in Law il All
Cooperate Guaranty Trusts
Large Foreign Exchange.

The value OF the new currency system.
with its federal reserve banks throughout
tho country. will depend on the strength
seen by the great foreign government
banks in the one TO be established in New
York CITY Either because OF the amount
Of its Individual resources. or ON account
of the extent Of its coordination with the
others OF the federal chain. the New York
bank must be able to have sufficient power
to affect the money marNet and provide
the necessary elasticity 20 the currency
which the present system does not furnish.
This was the opinion given yesterday
by j. 7. Morgan to William G McAdoo'
Secretary OF the Treasury, and David r.
Houston. Secretary Of Agriculture at the
continuation OF the hearings in the Cham-
Der Of Commerce preparatory 10 the estao-
Hshment Of the reserve system
Mr. Morgan. like Frank A. VANDERBILT
president OF the National City Bank, VINO
told his views 20 the Organization COM
mittee on Monday, was careful not 10
appeal for a federal reserve bank mere
with an enormous capital concentrated III
the district il is to serve. There was APP
narent a desire 10 avoid any remark that
might suggest the wish 10 bring about
tho establishment Of supreme central
bank in this city. and realization that
any attempt 70 do so would be construed
as move Of the so-called money trust
10 Increase its control over the nations
finances
Mr. Morgan. in fact, observed that he
supposed a federal bank in Washington
would eventually become the headquarters
Of the system.
Mr.. Morgan Emphasizes Confidence.
Like the testimony OF his father before
the Pu1o committee. in Washington year
ago. Mr.. Morgans opinions were that
confidence" not mere wealth. constituted
the greatest power for good in the ousl-
ness of the country.
81 suppose" he commented. that the
real object Of the law is TO have banking
system which would be Of benefit TO the
community. and this can be accomplished
If the federal banks are coordinate units
under proper management. As ] under
stand IL. the banks are not to be simply
reservoirs. bU. practically branches OF the
one system.
When Mr. Morgan, seating his large
frame on the small chair provided for
those appearing before the committee
was asked TO state his business experience
for the purposes of the record, there was
smile from those around him in which
Mr. NcAdoo. who asked the question,
Joined. MIR. Morgan sat stolidly bent for
ward and replied with seriousness:
NV general business experience has
heen with j. p Morgan & Co." he said
of which I have been partner tor
twenty wears / was also seven years IN
London with j. :. Morgan & Co, ana
have had some experience in foreign ana
domestic exchange
Mr. Morgan explained that he was only
moderately familiar with the currency
act and had not looked into the matter
to determine how much territory should
la served by the reserve bank in New
York CITY.
Must Command Respect Of Europe.
1T seems TO me essential" he said, TO
have one of the banks I'm New York which
would have so large a strength as 10
command the respect Of the European
nHUOTTi DdnhS ubi I iNit''' NV
capital IT should have. but the same re-
suit would be accomplished If it were
arranged that all the banks worked TO-
sether as coordinate units.
Il suppose there would be one IN WASH
ineton. as that would ultimately be the
Headquarters Of the federal reserve sys-
tenn.
Where else would you have the ban"s'
understanding that the law requires not
less than eight" Mr.. McAdoo asked.
Il should say three on the Atlanuc
seaboard. three in the Middle Yves"
counting Denver as one of them ana one
ON the Pac.dc Coast. do not kho"
where YOU would get your other
IT is not so much preponderahce u
cspital YOU need In the New horA p"'"
as resources
THAT is the important point. inter-
,,,nted the Secretary of the Treasury.
MANY Of those who have appeared nave
attached much importance to the amount
Of capltal when the strength OF the re-
so,,rces berind the bank is the main
feature.
Capital is margin on resources
piled the banker, and in that way Is l'i'
Dortaut But ! think that II the feue'" i
Reserve Board showed that all the re-
serve banks were working as one system
the foreign banks would feel they were
trading with all when doing business WI"
Ga. NV York institution
Mr.. Morgan to Provide Map.
MIR. Morgan was asked to have pre-
r,red a map showing the districts INTO
which he thought the country should be
divided lie promised 10 do 50. and SAID
h. would add any igures available regard
inc domestic and foreign exchange which
would AFFECT the operations between the
districts.
An interesting light on the volume OF
foreign exchange conducted through New
York city and on the large amount of that
trade handled by the Guaranty Trust
company was given by Max MAY, one Of
lie vice-presid,nts OF that institution.
The Guaranty Trust Company ne
said 10 SHOW the amount of foreign eN-
chanse passing through New York. sent
drafts 10 Europe with bills OF ladins al
tached for s.sssS5s bales of cotton last
,esr That amounts TO almost NJo.0ooJJ.
handled on the banks working capital Of
hon, s3a0DoOo ln addition about SIS
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