New-York tribune., 1914-11-12

been issued by the board has an lu'-
portant interest for importers nno e"-
porters:
"Wheneyer bank accoptGnces arc OF
fercd for rediscount it must appear on
tho face Of such noceptanoes thnt 'n'
proceeds thereof were used or are 10
be used i'm connection with a trans
action involving the importation or eN.
portation of goods; that is TO sny, ~
must appear that there has been an
nctunl bona fide sale which Involves
the transportation Of goods from some
foreign country 10 the United states
or from the United States to some ior-
eiRn country"
Although asserting that the most
ncute stage Of the recent financial
emergency appears TO have passed, the
board points out that considerable care
must be exercised at this time.
at should be borne in mind ~ says
that although our exports are showing
"A gratifying increase there is s.lll
large cash balance due to European
countries for which gold may be DE.
manded, and that a large quantity OF
American securities held abroad may
be returned TO the United States,
while. on the other hand, more than
$500 900, 900 Of emergency currency
must be gradually retired.
War and Its influence.
mo one can estimate the duration
OF the war nor predict what VIII De the
financial and commercial conditions
when peace shall be restored Our own
industrial development has been great,
" facilitated by foreign capital, ana
we have been accustomed TO borrow
large sums annually in Europe ana 70
sell American securities there, Whlch
attracted foreigners because OF their
higher rate Of return as compared win
European investments.
1T is probable that at the end OF
The war interest rates IN Europe "lll
be higher than they have been IN the
past and greater investment returns
will be yielded. The tremendous de-
struction Of property and waste oil
capital will not only check the now OF
European savings 20 the United states
but may dispose foreib investors 10
return US the securities they no" hold.
Lower money rates IN this country
would be likely to accentuate TINS ten
dency, while, on the other hand, higher
interest rates and larger investment re-
turns on our side would check IT..
The New York Clearing House Asso-
citation yesterday received the report OF
the special committee appointed 20 IN
vestigate the matter of reducing the
reserves Of the member banks TO con
form 10 the lower reserve provided IN
the Federal Reserve act and the new
state banking law. The action was made
necessary on account OF the opening OF
the local Federal Reserve bank Monday.
The committees recommendations
that reserves Of the national and state
banks be reduced 70 18 per cent and
those of trust companies TO 10 per cent
will be submitted to the association FOR
formal approval at smother meeting to-
morrow.
Among the changes 10 be made is one
permitting banks which clear through
members of the Clearing House, but
which have part Of their reserves de
posted in Federal Reserve banks other
than that Of this district, to count those
reserves though they were on de-
post here. This Will apply especially
TO institutions in New Jersey which are
members of the Federal Reserve Bank
at Philadelphia.
1t is understood that in paying IN the
reserves TO the central institution those
banks within messenger distance VIII
be required to turn in their funds Mon
day. Upstate banks, il was stated,
however, will be called upon 20 mail
their reserves on that dav.
Pierre Jay, chairman Of the local re
serve institution, said yesterday that
he did not expect that the credit OF the
New York bank will be restricted by
- 4. ont ON
the deposit of reserves with the Fed
eral Reserve banks throughout the
country. He thought the enormous
amount Of money which will be released
by the reduction of the reserve require
ments of the banks will easily Offset
the drain from Withdrawals by CORE
spondents.