The Washington herald., 1917-11-06
STRONG, BANKER,
LOAN BOOSTER
Holland Lauds Head Of New
York's Federal Bank
for Services.

When the history of the brilliantly
successful floating Of the Second Lib
erty Loan IL written the services OF
Benjamin Strong. jr., governor Of the
Federal Reserve Bank In New York
City. will inevitably have conspicuous
place.
Not only are men of finance and
prominent bankers already speaking
in admiration, even enthusiasm. Of the
service given by Mr.. Strong, but also
Of the wise counsel and the directing
suggestions which characterize his re-
Iation to this second loan.
Not only by reason of his position
as governor OF the reserve bank. but
/ also because Of the intense concentra-
tion OF energy. oversight and Of every
4 means whereby the loan could be sue
cessfulIy placed and the New York
] district meet in full the sum which it
was hoped to be raised here, Mr..
Strong contributed greatly to the
gratifying result.
Associated WIN wise Men.
At the same time he was also as
ISOLATED with a money concentration
which in other days might have been
spoken of rs a fine representation of
the money power, or the so-called
money trust" Within his Office was
constituted money committee"
whose object was carefully to protect
the money market and especially to
see to it that the proper needs of
merchants, manufacturers and others
for whom loans were necessary should
be fully met.
This money committee small In
number. yet as a whole represented
the great banking institutions Of New
York City. 1t made a call upon the
banks for cooperation in the arrang-
ing of what was called an emergency
fund. the aggregate of which was to
be s300.OoO 0C0.
For the banks to pledge themselves
at this time to make loans to mer-
chants and others which in the ag-
gregate might amount to $50 00O,OoO
was skopen OF as an extraordinary
undertaking In view of the fact that
the banks were expected to lend their
credit in vast amounts to those who
were ready to buy liberty bonds but
uld not nave 1uuuS lElIneuldlelS dNdll-
able for that purpose.
UnIhcation of Banks.
The work of this money committee
resulted in a unification Of the banks
of New York City whereby pledges
were quickly secured of money sup
port exceeding in amount any that the
banks had pledged themselves to fur
nish in the past and even in times of
panic. For as much as $500, 600 900 the
banks became unified
In a statement issued a few days
after the loan subscriptions were end
ed. Mr.. Strong said that the banks
acted as a unit so far as this purpose
was concerned.
Mr.. Strong and those who were as
sociated with him were not persuaded
that conditions We're such in the finan-
ciaI world as actually 10 compel the
banks of New York 20 unity them
selves for the purpose of protecting
legitimate business at the time the
people were subscribing for the $780,
10000 loan to the Federal government.
Nevertheless lest there might be
some apprehension ON the part OF
business men that the enormous ad-
vances to the government which were
to be made in the form of a second
liberty loan might for tine seriously
cripple the money market and make 1t
difficult for men Of business to secure
reasonable accommodations from their
banks, il was deemed expedient so to
act that the business world and the
leaders OF industry and others who
were relying upon commercial assist
ance from the banks should have ab-
solute confidence in the ability Of the
banks to protect them. Therefore an
nouncement was made that substan-
TALLY every bank in New York had in
cooperation perfected as a single unit
under the direction OF a so-called
money committee whereby as much as
S3OOO0O0CO could be made instantly
available for reasonable commercial
banking purposes.
Only a Form OF Taxation.
That this assurance was of great
avail is evident from the fact stated
by Mr.. Strong that only a part of the
amount pledged by the banks was
called for in the form of loans by
the regular and responsible customers
of the bank. Mr.. Strong stated fur
ther that had the amount needed been
found to be in excess of the 500, 90, 900
pledged, then the banks would have
come forward. still acting in cooper
alton, and pledged such further sum
as was needed.
The brilliant success which followed
this method furnishing assurance to
business interests 1n7I they would be
protected by the banks and be pro-
vided with all the accommodations
they were entitled to, Is one of the
best illustrations OF the modern ten
dency OF the banks of the country to-
wards perfect cooperation when CO.
operation, even to the extent of uni
fication. Is needed. Furthermore this
experience demonstrates that if there
be a money power It is one which
the people can rely upon for serving
Just ends. There IA no money trust
in the sense in which the term was
formerly used. There never will be
one under the present Federal reserve
banking system.
Whole District In Line.
Only with respect to the magnitude
of the financing which the subscrip-
tions to the Second Liberty Loan rep
resent does New York stand apart
from the other financial centers of the
United States. With one or two ex-
ceptions all Of tire Federal reserve dis
- trict marched in true and rythmic step
to the movement in New York City.
N..N-