New-York tribune., 1918-09-19
Bank Loans Nav
Be Scanned Closer
By War Committee
Financiers in Washington
for Capital Issues Con-
ference on Credit

Greater conservation of credit re-
sources for war purposes through a
much closer supervision oftbank loans
than has yet been instituted is ex
pcctcd TO result from n conference Of
bankers held in Washington yesterday
at the suggestion Of the Federal Re
serve Board. The New York Federal
Ecscrve district was represented by q
delegation of representative bankers
consisting of James A. Alexander, of
the National Bank of Commerce; C. Y.
Rich, of the National City Bank; A. II.
Wlggln, of the Chase National Bank:
Charles II. Sabin. of the Guaranty
trust Company, and Pierre Jay, chair
man of the board of the Federal Re-
servo Bank of New York.
According to information obtained
IN responsible Wall Street banking cir
c'cs' the meeting of the bankers be-
Tore the Capital Issues Committee Of
inc Federal Reserve Board at Wash
lhg'on may be followed by the formu
'"'ioh or plan IN all the twelve Fed
eral Reserve districts whereby all bank
loans, whether for commercial nurposes
or otherwise, in excess of 100000 will
come under the jurisdiction of the dis
'rlct committees. The Capital Issues
committee already has complete super-
vision over the sale of new securities
IN excess of 100000, having been
granted such power under tho terms of
'he war finance corporation act of Apri.
5 last.
proposed to Extend ScOpe
1T is now proposed to extend tho
scope of the Capital Issues Committees IS
OF tie various districts so as to give
'hcm power to pass upon all bank loans
IN excess Of the figure mentioned. AL
ready in the Federal Reserve District
of Boston the Capital Issues Committee
insists upon the submission of bankers
capital loans of 100000 and upward
to the committee.
Bankers here and elsewhere have OBJ
Jected to this extension of the activi-
ties of the Capital Issues Committee. ar
Gu'ng that any attempt that might be
made to investigate all bank loans
larger than 100000 might result in
grave embarrassment to prospective
borrowers and at the same time would
be almost a physical impossibilty. The
TASK would be enormous in this dis
trlct, particularly in view of the huge
amount of loans handled by the large
banks at this centre. A banker pointed
out yesterday that any attempt to go
INTO the matter carefully and in such
manner as not to interfere with the
smooth and natural working of the
credit market machinery would make
imperative the building up of q vast
organization.
lie doubted whether such an arrange
ment would be feasible. Other fnan-
clal men held that the bankers them
selves were best fitted to pass upon
their loan operations and could be
trusted to take care of the situation
IN manner that would prove salts
factory to the Federal Reserve Board
authorities.
Bankers and Committee Differ
1t is stated that in the practical
ADMINISTRATION of the Capital Issues
Committee some difference of opinion
has arisen between the bankers and
the various district committees as to
What constitutes capital loan and
Whether the same comes within the
jurisdiction. For the most part the
New York bankers have been coopcr-
atlng with the local committee in sub
mltting loans whore there was anv
doubt as regards the nature of tho
operation. 1t has been found that
there have been some unintentional
evaslons of the law, especially where
two or more loans have been made to
the same parties and for the same
purpose, which in the aggregate OK.
ceeded 900.
=, Some members of the Capital Issues
Committee are said to be desirous of
scrutlnlzlng loans even where they do
not exceed 100000. In St. Louis the
Federal Reserve Bank there has re.
qulrcd its member banks to submit to
the district committee all capital loans
above or below 100000.
The general campaign for consor.
vatlon OF credit has been forced bv the
steadily growing demands of the ,,ov.
crnment for funds with which tc
finance It's war programme. Onlv re.
Gently notice was served on the tinan.
clal community that speculation !,
securities on borrowed money wonll
not be countenanced by the powers ir
n