The Birmingham age-herald., 1916-12-15
HARDING DEFENDS RESERVE BOARDS
 RECENT WARNING
Says It Was Merely to Call Attention to Necessity of Examining Proposed
 Investments

Boston, December 14-Explanation of i the federal reserve boards recent warn- ing to American bankers against lock- ing up their money in foreign treasury bills was made in speech here tonight by w. P. G. Harding, governor of the board, who reiterated the declaration that there was no intention to reflect upon the credit of any nation. Soon after the boards statement appeared short term British treasury bills. which had been of fered for sale in this country, were with drawn.
 Mir. Harding spoke tonight before the Boston City club.
 T know he said, there has been crit icism of the boards action in making this statement, which has been given q significance neither justified nor intended in it's reference to investors.
 WAS MERE WARNING
 'In my opinion. what the board had in mind was simply this: American investors have for many years been accustomed to
 
 buying industrial securities. The investor has acquired the habit of requiring spe- cRc information regarding gross earn ings, fixed charges, net earnings, sink ing funds, etc., and he insists upon know ing definitely whether he is offered . first mortgage bond, income bond, pre- ferred stock or common stock.
 ;e af ice inc house. when offering securities. to state all necessary details. Nowhere is the importance of authentic and complete in- formation more fully understood and ap- preciated than in Europe, and prospect uses for general loans contain all the important facts relating thereto.
 "The board sought merely to call at- tention to the fact that the same busl- ness-lilxe habits which are well estab- lished regarding domestic loans should be developed in marketing foreign fiota- tions'
 MT. Harding denied that the stiffening of call money rates in New York after the statement was issued was due to the boards action.
 DISCUSSED GOLD IMPORTS
 
 Discussing the inflow of gold into the United States, he said the board did not regard it as a danger except "the inflow ing gold should remain uncontrolled and not permitted to become the basis of undesirable loan expansions and of in- flation."
 MT Harding said this country has been handicapped for many years by an in elastic currency, particularly legal ten der notes, or greenbacks and national bank notes" He said the suggestion has been made that it might be well to re- ouire retirement of s2oo, o,OOOOO0 national bank notes within three years.
 "Treasury notes possessing legal tender qualifications he continued, are out standing to the extent of ss4S.721, ,925, Of which s3ls,6Sl 01s are the old wartime sreenbacks and s2.04o,9o9 are treasury rotes of 1890. which were issued on ac- i count of silver purchases. but which are | payable in coin. The suggestion has been made frequently that advantage should be | taken of the plethora of gold to retire permanently these notes
 If Congress should ever decide upon \ the retirement of the greenbacks, the Ii-ederal reserve banks could be utilized las a means of effecting the operation without the slightest disturbance to in- terest rates or to credit facilities"