The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1915-08-26
BANKERS AMAZED
| BY RECENT REPORT
OF Mr.. WILLIAMS
Comptroller's Figures Up
set All Past Records By
Nations of World
RESERVES NEARING
TWO BILLION MARK
Situation Has Called Renewed Atten-
ton to Over Expansion Because
of Plethora of Money
Available
BY HOLLAND


New York, August Especial, )-of the
report which was made by the comptroller
of the currency. John Shelton Williams, a
few days ago, many things have been said
which disclose the qualification caused
by it and some things have been said
which reveal the astonishment, tempered
with enthusiasm, which the report &C.
casioned.
For some hours after the report was
made public attention was diverted from
it by reason of sudden and great excite
ment occasioned by the reports of a
movement to create stupendous credits for
some of the belligerent nations in the
United States and also by the great up
ward movement in the prices of stocks
which represent companies engaged in
war orders. There has been, however,
a careful reading of the comptrollers re-
port since it was first published, and
it has not been exceptional to hear the
comment made in directors rooms of
banking institutions that this is the
most extraordinary report of the kind
ever made either In this or any other coun-
try.
One bank president said in reading this
report that it should be remembered that
the federal reserve system has not been
in operation a year When the European
war began the old national banking sys-
tenn was still in effect. Clumsy as that
was, difficult as it made it to mobilize
reserves. entailing cooperation upon
great scale, and the solving of absolutely
new financial problems, nevertheless it
was possible even under that system to
bring order out of chaos within two
months. Comptroller Williams report
now makes 1t clear that had the federal
reserve system been for some months in
operation by August of last year the diff
ficulties which were then met and which
required courage and the highest kind
of ability to surmount would have been
more easily swept away.
In November last the federal reserve
system went into effect. Now, under that
system the national banks of the United
States are not only much stronger than
they have ever been but the comptroller
confidently asserts that they are fully
prepared to grapple with and successfully
work out any problem, however large,
which may be offered to them to solve.
This is regarded as an especially crafty
ing statement in view of the fact that
American finance is to be called upon to
meet the extraordinary emergencies which
have arisen on account of the European
war.
Emergencies of this kind 5 are srecog-s
nized by Comptroller Williams. who states
that demands are likely to be made upon
the banks, either directly or indirectly, in
connection with the extension of credit for
foreign purchases of American commodi-
ties and, Furthermore, to take up and alb
sorb American securities which the ex-
igencies of the beligerent nation may
compel them to sell.
In this statement, it is thought, is. re-
Elected the purpose of the administration
at Washington and of course, of the fed
eral reserve board to facilitate in every
Nay possible the adjustment of our finah>
cial rela tons with other nations, especial
~ those which have been occasioned by
the war.
In the comptroller's statement appear
to be reasons for believing that the ad-
ministration at Washington will not OBJ
ject as it did at the beginning of it's
terms, to the placing of foreign loans in
the country, although 1t may indicate the
desire that these loans appear in the
form of credits rather than American ac-
ceptance of the obligations of belligerenI
nations in case loans of this kind are TO
be used by the belligerents for maintain
ing the war
The Extraordinary Strength of Banks
In nine months the national banks of the
country and the ~ federal reserve banks
have SO increased their strength as to
make it possible for Comptroller Williams
to point out that they now have an I'M
employed loaning capacity which is suf-
ficient to make 1t possible to carry for
the planters of the south their entire cot
ton crop, although assistance of that kind
is not likely to be asked by the farmers
who have grown wheat or tobacco. But
in addition to this, Comptroller Williams
says these banks are able to finance he
liquidation of a thousand million dollars
Indebtedness which represents the ex-
ports of foodstuffs or manufactured prod
ucts which the United States has sold to
other nations in the world. Excellent au-
thority. in the financial district can be
quoted as saying that never before has
any nation been able to make a report
of this kind If it be also considered that
our present national banking system went
into effect as recently as last year.
The Control of Initiation
One of the greatest of American inter-
national bankers said last spring that a
danger lurked in the present condition of
our banks and the plethora of money,