The Birmingham age-herald., 1915-08-11
Harding's Recent Review Pointed Out Remarkable
 Aspects of Situation
SECURITIES HELD
 ABROAD NO MENACE
Even After War Financiers Believe This Country Will be Easily Able to Maintain Its Position of
 Financial Supremacy
By HOLLAND

New York August 1o.-tspecial.)-In con
 siderng the momentous changes which the
 European war caused within 12 months
 possibly pre-eminent among these changes
 are the new relations established by the
 United States in international financing If the European war has taught new and i heretofore undreamed of methods by
 which war may be carried on, the exi-
 gencies of the war have established Tn
 the United States new and hitherto un- dreamed of methods or regaining hnan- cial equilibrium and of adjusting speedily very difficult conditions so that substan- tally something like ease could be estab- lished or, at least. apprehension of chaos and panic be ended. In a communica- ton which was made immediately after
 the close of the past fiscal year by w. r. G. Harding member of the federal re- serve board at Washington, he spoke earn estly of the problems which the world
 war has created Some of these are en-
 tirely original new financial formula
 was necessarily worked out before fairly good answers to these problems could be
 obtained.
 The manner in which the leaders in Great Britain solved their stupendous and very difficult problem has been matched by the manner in which the men of finan- cial authority in the United States have solved some equally difficult but entirely different problems. MT. Harding says that normal conditions cannot be expected until peace is restored. Yet the United States is beyond any question, in his view, in stronger financial position than ever before in it's history. We have MT. Harding asserts, greater financial power today than any other nation of the world. v
 Confidential Proof Furnished
 Just before the close of the fiscal year excellent, but confidential, proof was fur nished proof of which MT. Harding had knowledge, that our position Is even stronger than the bankers had supposed It to be- The demonstration has been made that Europe cannot seriously affect our stock of gold through the sale of American securities in our markets. MT. Harding calls this apprehension, which a year ago at this time so strongly prevailed that 1t was one of the chief reasons for closing the New York Stock exchange, Ian old time bugaboo" It may no longer b. re- garded as a disturbing factor In our finan- cial situation, especially as there Is now established visible trade balance of con
 siderably over s1 1,o0o.o0 900 in our favor.
 American securities may be utilized in | li0uidatlng some part or lHlS lIdut pdi- ance. or they may be employed. as all ready has been done in France, as basis
 upon which loans from the United States can bo secured.
 In these comments. MT. Harding briefly
 epitomizes the amazing changes that have taken place in the United States with re- spect to its financial strength since De- tober of last year. No one in July or
 early August-at the time the New York
 Stock exchange determined to close It's
 doors-would have ventured to predict that in less than a year the United States would be financing the requirements Of many of the other nations of the world
 would he building up an enormous store
 of resources. would amply protect all of its gold and would be receiving millions of gold from other countries.
 Yet this Is exactly what has happened and by and by the story of this years fna ncial changes in the United States
 will be told This story will report what is the greatest and the most speedily
 consumm ated change In a financial situa- ton which any nation in the world has ever experienced.
 Tn october of last year the United States was still under the sway of the old national bank system It had beer often said of that system that it's great weakness lay In its inability swiftly to mobilize credits and resources so that | these might be used wherever in tho l country there was need of them. Had | the federal reserve system been in full | operation when the war in Europe be gan, our financiers would have more cas- | fly mastered a complicated and an entire | 1y new situation which. with meteorlil>t
 suddenness developed in the United States.
 Old Defect Overcome
 The defect however in our old ma tional banking system was overcome h, what will go on record. probably, as the | finest utilization of the principle of CO., opera ton which this or perhaps any other country had ever witnessed. The banks | of New York city. acting with the New | York clearing house as unit. and in q
 swiftly established method of cooperation
 secured nearly s10O. GOO in gold, which
 was exported to Canada. Only the leading
 financiers know how greatly that action
 gratified the bankers of London. a erati-
 flcation with which was mingled a. sense of astonishment. Immediately after this | brilliant and successful exploit was | financed. the national banks of the entire | United States, acting in cooperation and | fortified in that purpose by the counsels 1 of the federal reserve board a Washing | ton, which at that time had no other thar
 moral influence, since the federal reserve system had not been organized. under wrote a proposition involving s100. 900 in gold These two transactions will pass into history not only as among the most brilliant exploits of men of finance of the present or of any other age. but as serving to strengthen and maintain the
 credit of the United States.
 [ They did much to secure for the United States the confidence of other nations which Is not reflected in transactions to rAdc Af rf