The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-09-29
Worlds Biggest Trust Or.
ganization Aids Finan-
cial Mobilization.
RESOURCES S60O.OOO,O00
Action Likely TO Stimulate
Others to FOllOw-Will Ease
Money Rates.


its kind in the world, applied for entrance
to the Federal reserve banking system
yesterday. The decision was made at a
meeting Of the executive committee carly
this week. and the application Is now
In Washington. before the Federal Re-
serve Board. which is expected to give
It's approval Immediately, so as to per-
NIT the entrance OF the trust company
into the system by next Wednesday or
Thursday.
Tho application marks the elimination
Of nearly four years Of work on the
part OF the Federal Reserve Board and
the various reserve banks to make the
system desirable and attractive to the
State banks and trust companies, thus
preparing basis for placing the entire
financial resources OF the country under
single banking system for the first
time In the nations history.
sabin's Statement.
Charles H. Sabin. president OF the
company. made the following statement:
Recognising the Importance Of con-
centratins the financial strength of the
country and the 6esirabiity of the clos.
est possible cooperation among banking
institutions at the present time the
Guaranty Trust Company has applied for
admission 10 the Federal reserve sys-
tenn.
The material contribution which the
Guaranty Trus; Company will make
toward the mobilization Of national credit
for war purposes Is indicated by the
fact TINT II IL the largest trust company
In the world. with resources Of more
than $500. 100000 and deposits In ex-
cess OF $500. 200, ,00o."
In the entry of the larges. trust COM
pany into the system at this time bank
ers sec an example set for the other
country and they confidently expect
that q great many will follow the Guar
anty Trust Company. This is the one
thing now most desired both by the
fAderAk 0pYAranaDnt and important local
banking interests. IN view OF the un-
usually heavy responsibilities falling on
the banking resources Of the country and
the need Of unity OF banking resources
FOR wsr purposes.
Corn Exchanse Bank q Member.
SO far only about forty State banks
and trust companies in the country have
they are for the most part small. Among
the latest TO enter the system was the
Corn Exchange Bank, State institu.
tion. which operates more than thirty
five branches and has deposits Of more
| than 800, 100000. The first trust com
pany to enter the system IN this district
was the Broadway Trust Company.
| Since that company entered a number of
small trust companies In the upper part
OF the State have followed suit
| The most active move to have the
| State banks and trust companies joi,
! the system was taken just prior to the
| declaration OF war. when II was realized
that it was necessary to have complete
unit OF banking resources for a success
! full prosecution Of the war. At that time
the Federal Reserve Board drew up sew
eral amendments to the Federal reserve
act which were passed by Congress and
which made the entrance Of these classes
| Of institutions more attractive.
! Among the most important Of these
amendments was one which gave the
trust companies and State banks the
privilege OF withdrawing from the sys.
tenn at any time upon one years notice
These amendments also gave them the
right to deposit a portion Of their re.
serves with a Federal reserve bank &c
|
tenn. This has been taken advantage O,
by many Of the local institutions tina,
have not yet signifed their intention OF
becoming full members.
| Easier Money Expected.
Another important decision, which also
has had a favorable effect on trust com.
panies and State banks. was made re-.
I AAA
| claring that these Institutions Will bs
affected by certain restrictions df tn,
Clayton act Under the amendments ant
decision the Guaranty Trust Compan,
Joins the Federal reserve system with
out relinquishing In any way the right
granted II under it's existing State char.
ter. In view OF this, the company ma1
continue activities without changing III
business in the slightest detail.
The financial district regards the join
Ing OF the system by the Guaranty Trus
Company as one Of the most importan
financial moves since the declaration o
war. 1t also sees a solution Of tn,
present money market difficulties Il
other leading institutions OF this charac
ter in the city follow the lead of tn,
Guaranty. Bankers concede that tn,
reserve system has all tho powers neces
sary to keep money conditions easy II
me present crisis. but on account of tn,
fact that only one-half of the bankinl
Institutions Of the country. the nationa
banks, are members OF the system, 4
has been greatly handicapped.
The local Federal Reserve Bank ha
had a gold reserve for year of so I.
50 per cent. At times money has risei
to 8, Z or even is per cent. ana Officials
here have been only able to deal with 1
40 far a. they could with present facili
tee. with AL banking institutions |,
the system banks could avail thems ssive,
Of tho ,srye gold reserve Of the bank b,
rediscounting paper and acceptance
thereby relieving the whole none,
situation. At present only the nationa
banks or state banks and trust com
} panies that are members OF the system
can avail themselves Of the rediscount
Ing privilege.
second Only to National City.
Aside from being the largest trus
| company in the world. the Guara mt,
company 10 second only In size an,
banking resources to the National Cit.
Bank of New York, II has deposits O
s503 500 e00.s5. according to its las
Continued on Second Page.