The Birmingham age-herald., 1916-12-03

New York. December 2.--(SpecialO
 When J. P. Morgan & Co., announced
 last week that the sale of unsecured
 British treasury notes on this market
 would begin on December 1, Wall street
 believed firmly that at last a way had
 been found to finance the huge war supply purchases of the allies from us without further flooding this country with gold. But bright and early Mon
 day morning the assay office in Wall street announced that gold imports had been renewed in the form of $7,500, 900 shipment from Canada. Those gold ship ments not only continued throughout the week, but to the great surprise of the powers that be in Wall street the federal reserve board at Washington showed it's teeth by squarely placing its stamp of disapproval on the pur- chase by our banks of the British treas ury notes. These notes, the board pointed, although nominally short term securities, would almost certainly tie up the liquid funds of our banks through a long series of renewals or through the refunding of these notes into long-term bonds.
 Besides warning our banks against tying up their funds in the unsecured British treasury funds, the federal re- serve DOdIQ SldleQ ludI IL iletQ ilO Ltehl of more gold coming here, provided the banks did not take the gold and use it as the basis of speculation and in- flation. Thus, with the prospects of fur ther heavy gold imports, many busi- mess men not familiar with banking are asking; Just how does ethe gold we are receiving from abroad bring about speculation and imitation?
 On November 1, 1916, our gold hold kO nf n- l vember l, 1915, they were only $2,19S,- 1 900, 900; on November 1, 1914, $1,S35,- 900, OO0 That increase of $S65,000,000 in ] two years in our supply of the yellow metal enables an expansion in our bank loans of no less than $4325000,O0O
 Only a few days ago the comptroller of the currency issued statement show | ing that the loans of 27,000 banks and ! trust companies in the United States 1 had within the past three years in creased $3,243, 100000. That is phenome- nal expansion. With prospects of still
 more gold coming here from abroad more will be heard of the danger of | imitation. Just how do gold imports bring about imitation? That question is being asked every day.
 The business of bank is twofold, 1 first to accept deposits from firms corr 1 porations and individuals, and then to
  or individuals The difference between | the interest allowed on. deposits and
 the interest collected on loans is profit. ] Naturally a bank is anxious to make
 as many loans as possible and for the protection of those customers who might desire to withdraw, the law states that every New York national bank shall at all times have on hand Approximately one-ffth of it's deposits either in the shape of gold or green backs, which are government obliga- tions or in a credit on the federal re- serve bank.
 ! Take, for example, the case of the National City bank, which has just 1 published it's statement in reponse to a bank call-that is an order from 1 Washington to show it's condition or standing on a day named, prior to the 1 call At the close of business November 1 17, 1916, the National City had, among
 it's liabilities according to it's statement, 1 deposits amounting to $5S0,297, ,437 z On
 the assets side of the balance sheet, for the protection of these $530, ,2S7 437 depos- l it's, under the law are found greenbacks ] held in the banks vault to the amount