The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-08-20
PLENTY OF MONEY
National Banks Prepared to
Handle All Business.
Able to Finance Cotton, Wheat
and Tobacco Crops.
SURPLUS NEVER so IMMENSE
Reserve Justifies Expansion of
Credit of Billions.
Comptroller of Currency Will
Iiams CLOVIS With Optimism.

Washington, Aug. 2O.-Comptroller
of Currency Williams announces that
the present unemployed loaning ca
pacity of national banks and reserve
banks is sufficient to finance at mar
ket value the entire cotton crop and
half. il not all, of the tobacco and
wheat crops, and to conservatively
justify an expansion of credit to two
or three billion dollars
A statement issued by the con-
troller refers to the prospect for I'M
usual demands for funds particularly
in the event cotton should be declared
contraband by the European belliger-
ents. and declares a survey of the con-
dition of the national and reserve
banks is distinctly encouraging. Never
before, Mr.. Williams says, have the
banks been so strong and so thorough
ly prepared to handle any problem
that might be presented to them.
Special Requirements Summarized.
Just before the statement was is
sued the British embassy had author
lied the announcement that the allies
had agreed upon the principle that
quirements which the banks may have
to meet in the near future are sum-
married. by Mr.. Williams as follows:
First, the yearly recurring demand
for funds with which to move the
crops, which this year, except as to
cotton, are unusually large and COM
manding full prices
Second, 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 supplies of
all kinds and to pay for the American
securities, which may be returned to
US by foreign creditors.
Banks Never So Strong.
Continuing, the statement says:
The actual figures show that the
present condition of the national
banks of this country have never be-
fore been so strong and so thoroughly
prepared to grapple with and handle
successfully any problems, however
large, which may be presented to
them as they are today. The figures
show that the national banks of this
country and the twelve federal re-
serve banks. exclusive of state banks
and trust companies, have at this time
an unemployed loaning capacity suf-
ficient to enable them, if 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 1t is not, of
course, conceivable that they will be
asked to do, and also finance, until the
purchasers can pay us in gold or its
equivalent, thousand million dollars
or so of exports of foodstuffs or manu-
featured products to be shipped to the
rest of the world.
='Tt is far better for the banks to
loans on staple commodities where
they can relieve congestion or pro-
mote legitimate commercial transac-
tions rather than permit the funds to
be used for the initiation of the stock
markets where speculation in securi-
ties has already reached a point that
invites caution.
THE abstract of conditions of ma
tional banks June %, 1915. just con-
plSted, shows that notwithstanding
the great reduction in reserve reQtlire-
ments which went into effect with the
Inauguration of the federal reserve
system in November. last year, the ac-
tual reserves of the national banks on
June %, 1915, are far in excess of the
largest reserves ever held at any one
time in the past history of the country
and amounted to S1.S40. 100000. or
SITS, 100000 more than the amount
which the national banks are required
to hold.
Vast Extension of Credit.
This surplus reserve, it is esti-
mated. is sufficient to justify, on a
conservative basis, an expansion of
credit or a further lending power Of
say, two or three billion dollars. The
present total loans of all the national
banks amount to about six and two
thirds billion dollars. A year ago, or
on June 80, 1914, the surplus of the
national banks was only s41,0O0,0O0;
so that the increase over the surplus
reserve shown a year ago IS $737, 000,-
600
1.-THE total reserve of the national
banks exceeds by $319,00o,0O0 the
tiona1 banks at any time prior to the
passage of the federal reserve act
1.-The specie held by the national
banks and the federal reserve banks
amounts to close 20 one thousand mill
lion dollars. The srecie in the nation
81 10, Il