The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1915-08-25
John Skeiton Williams Points Out
That Resources Of Federal Reserve
and National Institutions are Am
pie to Take Care Of Staple-An-
nouncement Follows Notification Of
Its Contraband Character.
Its Contraband Character.

COulTdUduO, duu uSSleL1 SN IuoI A0'O
before had the banks been so strong
and so thoroughly prepared to handle
any problem.
Just before the statement was is
sued the British embassy authorized
the announcement that the Allies had
agreed on the principle that cotton
was contraband. Special requirements
which the banks may have to meet in
the near future were summarized by
Mr.. Williams as follows:
First. The yearly recurring de-
mand for funds with which to move
the crops, which this year, except as
to cotton, are unusually large and
commanding full prices.
Second. The unusual demand for
funds which may arise to enable cot
ton growers to meet any congestion
in the movement or marketing Of the
crop, in the event that cotton should
be declared contraband.
Third. Demands which are likely
to be made on national banks, both
directly and Indirectly, in connection
with the extension Of c.edit to for
eign purchasers Of supplies OF all
kinds, and to pay for the American
securities which may be returned to
US by foreign creditors.
Continuing the statement said:
''The actual figures show that the
present condition Of the national
banks of this country have never be-
fore been so strong and so thorough
ly prepared to grapple with and ham
die successfully any problem, how
ever large, which may be presented to
them, es they are to-day. These flg-
ures show that the national banks OF
this country and the twelve federal
reserve banks, exclusive OF state
banks and trust companies, have at
this time an unemployed loaning ca
pacity sufficient to enable them, II
need be, to carry for our own people
at market value the entire cotton
crop, and half if not the whole of the
wheat crop and tobacco crop, which
it is not oficourse conceivable that
they will be asked to do, and also
finance, until the purchasers can pay
us in gold or its equivalent. thou
sand million dollars or so of exports
of foodstuffs or manufactured prod
ucts to be shipped to the rest of the
world.
"It is far better for the banks to
employ their surplus funds in max
ing loans on staple commodities
where they can relieve congestion or
promote legitimate commercial trans
actions rather than permit these
funds to be used for the initiation OF
the stock markets where speculation
in securities has already reached a
point which invites caution.
"The abstract of condition OF ma
tional banks as Of June %, 1918,
lust completed, shows that notwith-
standing the great reduction N re-
serve requirements which went into
effect with the Inauguration of the
federal reserve system in November
last, the actual reserves OF the ma
tional banks to June %, 1918, are
far in excess of the largest reserves
ever held at any one time IN the past
history of the country and amounted
to one billion eight hundred and forty
million dollars or seven hundred and
seyenty-eight million dollars more
than the amount which the national
banks are required to hold.
"This surplus reserve, it is estl-
mated, is sufficient to justify, on a
conservative basis, an expansion of
credit, or further loaning power OF,
say, s2,000,O00,oo0 or s3,oo0,ooo,-
900. The present total loans OF all
the national banks amount to about
Sc, 6O,0OO,000. A year ago the sur
plus reserve of the national bank was
only s41,000,OO0, so that the increase
over the surplus reserve shown a
year ago is s37, 100000.
sThe total reserve of the national
banks now exceeds by S39,OOO,OO0
the greatest reserve ever held by ma
tional banks at any time prior to the
massage of the federal reserve act.
"Specie held by the national banks
and the federal reserve banks
amounts to close to s1,0OO,0OO,000.
The specie in the national banks IN
creased between May 1 and June Z3'
1915, s71,000,00O.
"The reports Of the federal reserve
banks at this time show that the
total amount of bills discounted and
acceptances held by these banks
amount to approximately $4,000
600, while the supply of gold which
the federal reserve banks have no"
on hand is sufficient to give these
hanks a further loal ing capacity, II
the occasion called for it, of more
than 63O,000,O0O additional, provid-
ed they could utilize their note lssu-
ing powers to the maximum.
against their maximum direct
borrowings in the past of Sl62,6 l..
900, the reports Of the natlonal
banks as of June %, 1915, show that
thev had on hand on that date paper
eligible for rediscount with the fed
eral reserve banks amounting to 81
GIG 100000, which i. more than ten
times the maximum amount WHICH
tha national banks of the country
according to their sworn statements
to the comptroller Of the currency
have ever heretofore had occasion &c
borrow on their bills payable or Ds
rediscounts.
"The sound ess of our new bank
ing and currency system and its aDll'
itv to meet successfully even the
most trying emergencies have been
demonstrated. We also have conn
dence that it will be equally able tc
cope with and control initiation grow
| ing out of prosperity. 1t behooves the
national banks and the department
of the government charged with thell
SUPERVISION to exercise, under pres
emit circumstances, the utmost Vls!'
lance and q wholesome restraint les'