New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-08
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manner as possible. Now necessity
has compelled them to invest only in
government loans; even some Of the
old investments have not the same
realiZable value as in the past. The
balance sheets of these concerns
show big totals, but the question is
whether they could obtain sufficient
liquid funds to meet the claims as
they arise. IL is understood that
about one-ffth Of the total claims
are in foreign countries. To GER
tain extent, the policy Of investing
a proportionate share Of their assets
in the countries in which they oper-
ate has been followed, but the COM
panies always preferred to bring
the funds to London and distribute
them from there. The position Of
Germany, which had an information
al business inferior only TO that Of
Great Britain, is no better than that
of England. Payment Of claims will
become difficult under conditions
that are likely to prevail. The war
has been an incentive TO the growth
Of local business in all countries; in
other words, the heavy debts piling
up in Europe have shaken the conf
dence of the public in neutral coun-
tries. in the financial stability Of
such companies. This will inevitably
mean a reduction in the foreign bust |
ness of European companies. Apart |
from these influences, the efforts
now being made in Germany TO lib /
crate the German insurance system !.
from English influence will certainly I
not help either England or Ger !
many. To some extent this will |
prove a good opportunity for the |
American insurance companies. Al |
though remarkable progress has
been made in the United States it
self, our insurance companies have :
not been very successful in captur-
ing foreign business. To a certain .
extent we ought to benefit by the .
present opportunity, but the result .
Of our efforts is not likely 10 be very
great, because of the desire of the /
countries that formerly dealt with .
England and Germany to develop
their own businesses.
The Foreign Trade Bureau of the
Philadelphia Commercial Museum,
commenting upon the fact that the F.
Federal Reserve Board has author
lied the New York Federal Reserve .
Bank to enter into foreign exchange
relations with the Bank OF England,
says this is the first step toward
what may be radical departure
from the established banking policy
Of the United States. It supposes
that like arrangements will follow
with the Bank Of France, with the
Imperial Bank Of Germany (in time,
CT course), and with the state banks
Of other foreign countries, and says:
It is doubtful if even information
al banking circles as yet under
stand the full meaning and appre-
ciatc the possibilities Of the close
sfiliation Of two such representa-
tive, powerful and quasi-public
agencies as the Bank Of England
and the Federal Reserve Bank Of
New York. On the part of the
United States il does mean. how
ever, that the government will DC
able, should the necessity arise, to
exercise a certain regulatory infu-
ence on exchange business. II like
wise means that the government It.
self will be able, through this con-
troll, 10 participate In banking
transactions 10 an extent not at
tempted or contemplated since the
charter Of the Bank OF the United
States expired, just eighty years
ago.
But it is a radical departure also
for the Bank of England, which be
fore the war never had either for
eign agent or foreign branch. While
the Federal Reserve Bank act was
passing the idea was much empha-
sized that the twelve regional Re
serve banks should be bankers
banks" and that they should not
compete for business with private
CT member banks. But the tempta-
ton of bank to do banking is fairly
irresistible. The Federal Reserve
banks are banks, in fact, with CAPT
tai, equipment and a Discrimination
to remain in a static condition. The
theory of bankers was that they
should do as little banking as pos
sible until they were needed to do
business which private banks were
unable to do; the disposition of the
Federal Reserve banks has been to
do as much banking as possible. The
private banks have complained a
little. That they have not COM