Evening star., 1916-09-29
EXPORTS OF GOLD
MAYF0LL0W WAR
Paul N. Warburg Warns FL
nanciers to Prepare for
Possible Emergency.
SAYS FOREIGN LOANS
MAY ATTRACT CAPITAL
In Address Before American Bank
ers' Association Advises the Mem
bers to Forearm"

KANSAS CITY, Mo-, September 90
Heavy exports of gold from this coun-
try to Europe may follow the close of
the European war" said Paul NJ. War
burg, vice governor of the federal re-
serve board. in an address before the
American Bankers Association here to-
day.
foreign loans in the old and new
world may attract our capital at inter-
est rates far in excess Of our own" he
said. Our exports will have to meet
the keen competition Of other nations,
while the purchasing power of many a
nation will be found materially reduced,
even though in the beginning there will
be 4 strong demand for certain of our
raw materials.
Heavy Exports Probable.
These conditions. in the long run,
may be the cause Of heavy gold exports
from the United States, and, 1t we re-
main unprepared, may prove a serious
check. II. on the other hand, we fore
arm, we will be given the opportunity
Of taking our place as the strongest of
the worlds bankers and furnished the
basis Of solid expansion of our busi-
ness"
Mr.. Warburg appealed to the bank
ers to forearm by increasing their
balances with the federal reserve banks
| and releasing some of the gold in their
vaults.
Keep all the gold in your vaults,
where 1t Is useless for yourselves, and
deprive it of the additional force that
| it may gain in the hands of the federal
reserve BANKS; keep every cash till in
/ nfal 70 OF Ir,y oln
| stores and what-not filled with gold
| certificates, and you will rob the coun-
| try of Its legitimate opportunities of
growth, Of helping the world"
Shows Excess Lending Power.
He cited figures to show that the
excess lending power of the federal re-
serve banks is s206, 6,101 900 If loans are
taken in lawful" money. and s5O1. $685.
$50 IL the loans are taken in federal re-
serve notes. He advocated speedy re-
tirement of national bank notes in
| favor OF reserve notes in order to OBJ
tain "a currency that is elastic" The
4 federal reserve act should be perfected
he said, in various details, although
| profoundly convinced that the federal
| reserve act will prove one of the most
| constructive contributions ever made
by Congress, and the further the sys-
tenn develops the more apparent this
| will become"
Country Bankers Win.
The fight of the country bankers
against the collection and clearance
of checks without charge, recently pro-
mulgated by the federal reserve system
was won by them by the adoption OF
a resolution asking amendment of the
reserve act so to permit small banks
to charge on their clearances.
| The discontinuance of the use Of gold
as currency, except as reserves on
which federal reserve notes might be
| issued, was advocated by w. P. G.
| Harding. governor of the reserve sys-
tenn, who made a short address. He
| urged cautious banking methods ''to
avoid imitation of the currency and
credit"
| The nominating committee will rec
ommend the election as new officers
according to announcement, of P. w
| Goebel Of Kansas City, Kan, present
| vice president, for president, and c. A
| Hinsch of Cincinnati, Ohio, vice presi-
| dent.