The Leon reporter. (Leon, Iowa) 1887-1930, 1915-08-26
BANKS HAVE BIG LOAN1NG CA
pACITY
Comptroller Williams Says. Sufficient
to Finance Nearly All Crops.

| Washington, Aug. 9.-Comptrol-
Ter of the Currency Williams an
nounccd today that the present I'M
employed loaning capacity of the ma
| tional banks and reserve banks was
sufficient to finance at market value
the entire cotton crop and half, ii
! not all, of the tobacco and wheat
crops and to conservatively justify
an expansion of credit of two or
three billion dollars.
A statement issued by the comp
troller referred to the prospect Tor
unusual demands for funds, partlcu-
! larry in the event cotton should be
declared contraband by the Euro
pean belligerents and declared a sur
! vey of the condition of the national
and reserve banks was distinctly en-
couraging.
Never before, Mr.. Williams said,
had the banks been SO strong and so
thoroughly prepared to handle all
problems that might be presented to
| them.
Special requirements which the
banks may have to meet in the near
I future were summarized by Mr.. Will
liams 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 of war.
Third, the demands which are
likely to be made upon the national
banks both directly and indirectly,
in connection with the extension OF
credit to foreign purchasers of sup
plies of all kinds and to pay for the
American securities, which may be
returned to us by foreign creditors. .,
Continuing the statement said:
1T 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 tran
sactions, than to permit these funds
to be used for the initiation OF the
stock markets, where speculation in
securities already has reached
point which invites caution.
"The abstract of condition of ma
tional banks, as of June %, 1915,
just completed shows that the actual
reserves of the national banks on
June 20, 1915, were far in excess OF
the largest reserves ever held at any
one time in the past history OF the
country and amounted to $780,
100000 or $77S,00O,00O 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 two or three billion dollars. 1ne
present total loans of all the nation
al banks amount to about six and
two-thirds; billion dollars. A year
ago, or on June 80, 1914, the surplus
reserve of the national banks was
only 100000, so that the in
crease over the surplus reserve
shown a year ago is $737,O00,00O.
.'The specie held by the national
banks and the federal reserve banks
amounts to close to one thousand
million dollars. The specie in the
national banks increased between
May 1 and June %, 1915, ,000,-
0OO
1.-THE reports of the federal re-
serve banks at this time show that
the total amount of bills discounted
and acceptances held by these banks
amount to approximately 100000
900, while the supply of gold. which
the federal reserve banks now have
on hand is sufficient to give these
banks further loaning capacity, ii
the occasion called for it, of more
than $63O,OOO,OOO additional, pro-
vided they. should utilize their note
issuing powers to the maximum.
: Against the maximum direct bor-
rowings in the past of $162,617 900,
the reports of the national banks as
of June 23, 1915, show that they
had on hand on that date paper eli.
gible for rediscount with the federal
reserve banks amounting to $685.
100000, which is more than ten
times the maximum amount, which
the national banks of the country,
according to their sworn statements
to the comptroller of the currency,
have ever heretofore had occasion to
borrow on their bills payable or by
redisccunts.
'The soundness of our new bank
ing and currency system and it's
ability to meet successfully even the
most irving emergencies, have been
demonstrated. We also have conf
dence that it will be equally able to
cope with and control initiation grow
ing out Of prosperity.
ct behooves the national banks
and the department of the govern
nent charged with their supervision
70 exercise under present circum-
stances. the utmost vigilance and
wholesome restraint lest over conf
dence and unwise expansion or spec
ulation may check the prosperity
which now seems so likely to in
crease and endure