The Birmingham age-herald., 1917-10-20

New York. October 19.-(SpeclaL) A few days ago Frank A. Vanderlip came from Washington to New York for the sole purpose of speaking to a group of bankers and some of the lead CTS in large industries, about certain features of the governments financial operations, and especially the new lib- erty loan. MT. Vanderlip then said among other things that it might be found necessary in case the government is to secure the full amount, some S14,- 000, 900 ,000, which will be needed be- tween this time and next June to con- script the credit resources of the think that it would be necessary for the government to take action of that kind. It would be an emergency meas ure, held in reserve in case of need of utilizing it.
 The government would not, in MT. vanderlip's view, be compelled to adopt this extreme measure if the banks of the United States acted in thorough cooperation, -ordinating their re- sources and credit as though they all were a single, central bank. The banks, MT. vanderlip said, possess the re- sources somewhat in excess of $38,- 900. 900, 900. The credit resources. if we'll utilized and made available through thorough cooperation, would. in MT. lvanderlip's opinion. greatly exceed this amount.
 Of course, considerable discussion fol- lowed the publication of MT. Wander lips statement. Not all of the bankers appeared throughout to have grasped the meaning behind MT. vanderlip's re-
 mark. Very likely it was in part due
 MT Vanderlip meant that Benjamin Strong, IT,, governor of the federal re- serve bank of New York city, a few
 days later made a statement which
 serves fully to explain MT. vanderlip.a meaning. Governor Strong has always
 been persuaded that under the operation of the federal reserve system it would l be possible to finance all of the gov
 ernment's needs as long as the war
 lasted. He Is quoted as having said that 1 if 1t were necessary, then the banks oi
 the United States could be relied upon ] to furnish all the facilities needed for l floating the second liberty loan, although | for the best moral effect it would be | far better if the loan were fully sub.
 scribed by individual subscriptions, many which, of course, would be aided by the banks. The President and Secretary Mo. Adoo have, according to the under.
 standing of the New York bankers. al well as that of some of the leaders ol
 the large industries. been very anxious that the second liberty loan should R even to greater extent than the frs one was a genuine and spontaneou popular offering. The moral effect o
 subscriptions received in this way woul,
 be much greater than any favorable ,n fluence that might follow the financinl
 of the loan by the banks of the Unite,
 States.
 I It is evident that Governor Strong i greatly rejoiced that some of the large trust companies in New York hay within 8 few days made application fo membership in the federal reserve sys
 tenn. No wonder. bankers say. that Gov
 ernor Strong is elated over this actior for there are two reasons why he shout khave contemplated 1t with very grea satisfaction. One of the reasons Gov ernor Strong gives in his statement, say ling that the trust companies of Ne,
 York city which have applied for mem
 ibership in the federal reserve syster have aggregated resources of little owe $1, 800 600. When hey are admitted t i. the federal reserve system they will b able to increase the cash reserve of tn
 federal reserve bank from $63O, ,0O0 t $720 ,000. 900. These are figures that con tpare favorably with the reports of tn strength of four or five of the greates
 banks in England. By reason of thi
 increase in- the cash reserve the feders reserve bank of New York may, if 1t | 1 so disposed and if the action be deeme ! expedient, increase It's loans by $1.1OO.OO0 } 600 and an action of that kind would ir crease the capacity of the banks in tl !. second federal reserve district to len , | 8. .0oO. .O0o0oO more than they were ab : to lend before the six trust institution few days ago applied for membershi l, in the federal reserve system.
 7 Governor Strong sounded note 7 caution which Is evidently meant for u
 ears of those who might be disposed . ltake advantage of this increased lendir \ capacity to borrow money with which n make investments or possibly with whis 2 to operate in the securities market. Tl
 increased strength of the federal reser'
 systena. by means of the mobili1lng MI , It of tho six state chartered inst3tution ] maist Do % conserved na to prefect q