New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-15

nesg-like habits which are well estab-
lisbed regarding domestic loans should
be developed in marketing foreign TO
tations.'
Must Control Gold Inflow
Mr.. Harding denied that the stiffcn-
ing Of call money rates in New York
after tho statement was Issued, was due
TO the boards action, and said that any
furry" at that time was confined en-
tirely TO loans secured By Stock TX
change collateral Discussing the in
flow OF gold into the United States, he
said the board did not regard It as a
danger except "thc iuAowing gold
should remain uncontrolled and be per-
nitted 10 become the basis Of undesir-
able loan expansions and of imitation
lie poiuted out the board had sug
gcsted that step toward control Of
this gold By cooperation by the banks
would be an act Of Congress authoriz-
ing the final immediate transfer Of law
full reserves of banks members Of the
reserve system to tho proper Federal
Reserve bank.
There are now he added, approx
mately :6OO,0OO,OoO Of so-called reserves
held by national bank reserve agents
which. il the amendment becomes a
law. and in euy event m November
1917, will no longer be counted as such
and will have the status simply Of bal
snce in bank. The actual gold require
ments will be increased By about $780,
OOO. 900, and if we do not regard profit
AS a first consideration, there are other
means by which the continued inflow
Of gold into this country can be used to
its lasting benefits"
Mr.. Harding said this country has
been handicapped for many years by an
inelastic currency, particularly legal
tender notes or greenbacks and national
bank notes" He said the suggestion
has been made that it might be well to
require retirement of s2OO,O0O,ooo ma
tional bank notes within three years.
Suggests Retiring Greenbacks
Treasury notes possessing 'egal ten
der qualifications" he continued, ARE
outstanding to the extent Of I34S,72l,-
e25. of which -346,6S1,O 16 are the old
wartime greenbacks and s2,o4o,so9 are
Treasury notes of 1890, which were is-
sued on account Of silver purchases, but
which are PAYABLE in coin. The sugges-
ton has been made frequently that ad-
vantage should be taken Of the plethora
of gold 70 retire permanently these
notes. No doubt some opposition which
manifested itself in the early seventies
against the retirement Of legal tender
notes may spring up again should their
retirement be seriously considered. But
If our currency is redundant, would 1t
not be wise to strengthen It by retain
ing gold. at the same time retiring the
notes which have caused so much con-
troversy and disturbance In times past?
"The principal objection will prob
ably come from those who may fear
that the retirement Of the legal tender
notes will lead to permanent contrac-
ton. but if they could be convinced that
this is not the case and that the vacuum
created could be filed at any time when
necessary by Federal Reserve notes OF
a truly elastic character, their oPposi-
ton would have little TO rest upon.
Tf Congress should ever decide upon
the retirement of the greenback the
Federal Reserve banks could be utilized
as q means Of etfecting the operation
without the slightest disturbance to IN
terest rates or to credit facilities"