The Sentinel=record., 1916-12-15
HEAD IF FfDERALs
 RESERVE BOARD TALKS
WARNING TO AMERICAN BANK FRS DID NOT REFLECT ON CREDIT OF WARRlNG MA
 TIONS.

Boston, Dec. 14--AB expiauation O. the fedora. reserve boards recent warning to American bankers agains. locking up their money ia foreign treasury lills was made in q s9eech here tonight by W. P. G. Harding, gov ernor of the board, who reiterated the declaration tat there was no inten- tion to reflect upon the credit of any nation. Soon aUe. the boards state- ment appeared short term British treasury bills, which had been offered for sale in this country were with drawn.
 Mir. Harding spoke tonight before the Boston City Club
 T know," he said, that there has been criticism O. the boards action in making this statement, which has been given significance neither ids- tified nor intended in it's reference 10 investors. 1t was not the purpose of the board to make an attack either upcn or convert upon the credit of any government nor did it seek in it's statement to reflect upon any particu- ia1 obligations.
 | Tn my opinion, what tue board had m mind when it made its brief ref
 erence to investigators was simply this; American investors have for many years been accustomed to buy ing industrial securities railroad o0- 1 igations to great extent. In dealing with these securities certain well cs- | abolished rules have been deye.opel The investor has acquired the habit l of requiring specific in rmauo1 re- gardiug gross earnings fixed charges, net earnings, sinking funds, etc. and
 he insists upon knowing definitely whether he is offered a first mortage bond, income bond, pre,orred stock or common stock
 Tt is the practice Of every issuing house when offering securities 70 | state all necessary details either cves it's own signature or that O. the head of the borrowing corporation No where is the importance cf authentic and complete Information more fully understood and appreciated than n Ear,pe. both in England and on the
 continent and prospectuses for for 1 eigl loans contain al the imJrtalt facts relating thereto, in a statement signed by al authorized representa- tive Of the foreign government or 5y
 the issuing house or in some cases by both.
 "1he board s.usht merely to ca at. tention to the fact that as this couu. l try has become an important market l .or foreign securities the same busi-
 nessliAe habits which are well esta5- lshed regarding q nestle leans
 s-ould be developed in marketing fo-- eign flotations.
 Discussing the flow of gold into the
 United States, Mir Harding said tine
 board did not regard it as a dange.
 un.ess the inflowing gold should re. main uncOntro led and be permitted
 to become the basis Of undesirable loan expansions and of inflation" He pointed cut that the board had sug- gested an act of congress authorizing the final immediate trans CT of lawfVl reserve of banks members of the re-
 serve system to the proper federal re
 serve bank.
 There are now" he added aD prcximately $600,0OO,0O0 of so-caleo
 reserves held by national hank re
 serve agents which, if the amend lment becomes q law and any pyaut
 in November 1911 will no longer be
 c1unted as suc1 and will have the
 status simply ot balance in bank. The lattual requirements will be increased ! by about S200, 0,000.000 and if We do not lregard profit as a fi,5 consideration
 there are other means by which the continued inflow of gold into this Icoantry can he used to its lasting ben afite"