New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-11-28

: investment market supplies an I'M
portant regulator OF the volume OF OUT
sales 20 foreign countries IN excess oil
the goods that they send US. me form
which the most recent borrowing is tax
ing. apart from reference TO its intrin-
sic merits. makes il appear particular
Is attractive as banking investment,
The board. as a matter Of fact, under
stands that it is expected TO place II
primarily with banks.
"In fact IL would appear so attrac-
tive that unless a broader and national
point Of view be adopted individual
banks might easily be tempted to IN
vest in il TO such an extent that the
banking resources of this country en-
ployed in this manner might run into
many hundreds Of millions Of dollars.
while the loans may be short IN form
and severally may be collected at
maturity. the object Of the borrower
must be to attempt to renew them col
lectively. with the result that the ag-
cregate amount placed here will remain
until such time as It may be adYan-
tageously converted into long term
obligation.
LIQUID Funds Absorbed
at would therefore seem as conse-
quence that liquid funds Of our banks,
which should be available for short
credit facilities to our merchants
manufacturer and farmers, would be-
exposed to the danger of being ao-
sorbed for other purposes to dlspro-
portionate degree, especially IN view OF
the fact that many Of our banks anil
trust companies are already carry ins
substantial amounts Of foreign obllga-
lions and OF acceptances which tney
are under agreement to renew. me
board deems il, therefore, It's duty 10
caution the member banks that II does
not regard il in the interest OF the
country at this time that they invest IN
foreign treasury bills of this character.
"The board does not consider that l.
is called upon 10 advise private in
vestors, but as the United States -
fast becoming the banker of foreign
countries in all parts of the world l..
takes occasion to suggest that the m
weston should receive full and authori-
tative data-pa rticularly in the case Of
unsecured loans in order that ne may
Judge the future intelligently in the
light of present conditions and in con
junction with the economic develop
ments Of the past.
Trade Danger Small
"The United States has now attained
a position of wealth and of interna-
tional financial power which, in the
natural course of events, it could not
have reached for generation. While
il is true that slowing down in the
process Of credit extension may mean
some curtailment of our abnormally
stimulated export trade to certain
countries, we need not fear that our
business will fall off precipitately
should we become more conservative IN
the matter Of investing in loans, be-
cause there are still hundreds OF mill
ions of our own and foreign cecurities
held abroad which our investors would
be glad TO take over, and, moreover,
trade can be stimulated in other direc-
tions.
an the opinion of the board, il -
the duty OF our banks TO remain lquld
in order that they may be able to con-
tinue to respond TO our home require
ments. the nature and scope OF which
none can foresee, and in order that our
present economic and financial strength
NAV be maintained when. at the end OF
the war. we shall wish to do our full
construction and development which
will then lie ahead of us, and when
clearer understanding of economic cor
ditions as they will then exist will en-
able this country more safely and m
diligently to do its proper part IN the
financial rehabilitation Of the world"
The declaration of the Federal Re-
serve Board was not received IN New
York until after the close of business,
and bankers most competent TO discuss
its meaning and possible effect were
for the most part out of town or other
wise inaccessible. or the Morgan group
of bankers only A. Barton Hepburn
could be reached, but he declined to
discuss the matter.
81 would not care" said he, "to COM
ment on the statement of the board
without the opportunity carefully to
consider what il has said and what IL
recommends should be done. IL is too
important a matter
81 7Q5 OO0 600 i'm Loans