The Bridgeport evening farmer., 1916-11-28

THE sales to foreign countries in excess of l the goods that they send us. The form which the most recent borrow ] ing is taking, apart from reference to l it's intrinsic merits, makes it appear particularly attractive as a banking investment.
 "The board as 0 matter of fact, un- derstands that it is expected to place I it primarily with banks. Tn fact, 1t would appear so attractive that unless a broader and national point of view be adopted individual banks might easily be tempted to invest in it to such an extent that the banking re- sources of this country employed in this manner might run into many hundreds of millions of dollars. Will Want to Renew Loans.
 While the loans may be short in form and severally may be collected at maturity, the object of the bor- rover must be to attempt to renew them collectively, with the result that the aggregate amount placed here will remain until such time as 1t may be advantageously converted into a long term obligation.
 'It would, therefore, seem as a con- sequence that liquid funds of our fbanks, which should be available for short credit facilities to our mer- chants, manufacturers and farmers, would be exposed to the danger of be- ing absorbed for other purposes to a ldisprOportionate degree, especially In view of the fact that many of our banks and trust companies are a1- ready carrying substantial amounts of foreign obligations and of acceptances, which they are under agreement to renew.
 "The Board deems it therefore its duty to caution the member banks that it does not regard it in the in- terest of the country at this time that i they invest in foreign Treasury billS of this character
 'The Board does not consider that l it is called upon to advise private in- vestors, but as the United States is fast becoming the banker of foreign countries in all parts of the world, it | takes occasion to suggest that the in- vestor should receive full and author itative data-particularly in the case of unsecured loans-in> order that he may judge the future intelligently in the light of present condidtions and in conjunction with the economic deve1- opment of the past.
 Must Not Impair Position. | '"The United States has now at- tained position of wealth and of international financial power which, in the natural course of events, it could not have reached for a genera ] tion. We must be careful not to im- pair this position of strength and in dependence.
 While it is true that slowing down in the process of credit exten- sion 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 invest | ing in loans, because there are still foreign securities held abroad which our investors would be glad to take l over, and moreover, trade can be stimulated in other directions. l "In the opinion of the board, it is l the duty of our banks to remain liquid in order that they may be able l to continue to respond to our home requirements, the nature and scope of which none can foresee, and in order that our present economic and 1 financial strength may be maintained when, at the end of the war, we shall wish to do our full share of the work of international reconstruction and development which will then lie ahead of us, and when clearer under standing of economic conditions as | they will then exist will enable this l country more safely and intelligently to do it's proper part in the financial rehabilitation of the world''