New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-25
WOULD FORESTALL
SPECULATION RIOT
Strong Warns Bankers to
Guard Surplus Sums
Carefully.

Saratoga. y. Y. June 24.-The huge
sum at present held by the banks "
the country over and above the legal
reserve requirements needs to be guard
ed carefully from fostering riot Of
speculation and might well he used to
finance the commerce of the world at
this period when only the United states
is able TO FIJI the gap in the worlds
credit system. in the opinion Of BenJa-
mine Strong, jr., governor OF the Fed
eral Reserve Bank, of New York. who
spoke at the convention Of the New
York State Bankers Association, which
opened here to-day.
"The Controllers report Of March
L." Mr.. Strong said, disclosed that ex-
cess reserve had increased to s7S4,-
100000 held by the national banks
alone. 1t may be assumed that another
very large excess reserve, but PROBABLY
less than this sum, is also held by
state institutions.
There is, in fact, held in trust by
the banks of this country credit OF
such vast proportion that its custody
and use impose a huge responsibility.
The situation is one that might easily
lead to a riot of speculation, imitation
and exploitation. if the bankers were so
unwise as to permit it. We may, on
the other hand, employ this vast credit
to meet the demands of the commerce
Of the world at a time when we alone,
Of all the great nations, are able to fill
the gap in the worlds credit system
which has been created by the Eu-
ropean war"
A plea that New York State bankers
institute policy OF cooperation which
would help the United States to take
the leading place in the industry of
the world was made by James II. Per
kns, president Of the association. Mr..
Perkins spoke hopefully Of the eco
nomic situation. He said:
"A firm foundation has been laid
for new development. Loans are re-
duced, and so are stocks of merchan-
disc. This condition, in conjunction
with the great cereal crop of last year;
the fine way in which the South ulti-
mately handled its delicate cotton sit
ustion, and the excellent prospects for
a great cereal crop this year surely in
business will not stay still long with
a per cent money market.
"We are also confronted with new
problem-the development of our for
eign trade, and this occasion comes by
curious chance at the first moment at
which we could answer the demand,
for to-day the increase in our manu-
featuring capacity has made foreign
markets necessary, il We are to keep
our manufacturing population busy.
Efficiency and cooperation are the two
great needs of the moment.
I'VE are going out INTO the world
where we are not protected by any tar
if wall. where We must meet, not now
but very soon, the competition OF n
country like Germany, organized 10 ne
last detail for the expansion OF her
trade: a country where big productive
organizations are not only allowed 10
exist. but are supported and helped ny
the government; country IN whicn
the spirit of cooperation is developed
to a high degree.
our new banking law has just gone
| into operation. 1t IS beyond question
that strong unified system which
COMPRISES the whole banking power Of
the country is desirable, Dut it is de-
I
| every section Of the country; only II II
! is the best machine available for carry
ing on the most important part Of the
countrys industrial work. We have
such a law. Docs it meet our needs
/ If not, in what respects? How can we
| change it so that it may better per
/ form its functions?
"These are the questions which arc
/ before us at this convention, and my
| object in speaking as | do is to see #
can influence the attitude with which
we a roach the discussion. Let Us
/ stand ready to criticise the new Law
| bu. only in a helpful. constructive way
Let US remember that the Reserve
Bank belongs to the members, and lei
us institute policy of cooperation
which, if followed, will make us-the
| United States-to take the leading place
in the industry of the world"