The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-08
STOCK EXCHANGE
REFORMS ARE URGED
Senator Owen Advocates the
Adoption Of Bi-Wcekly
Settlements.
BANKERS FAVOR PLAN
Chairman of Important Com
mittee Going Abroad to
STUDY Financing.
BANKERS FAVOR PLAN

Robert l.. Owen, chairman OF the
United States Senate Banking and Cur
rency Committee, who is comforting here
with bankers before going abroad next
tuesday to study English. French. Span
Ish and Italian commercial banking con-
dltions. announced yesterday that n
movement is under way for the adoption
OF bi-weekly settlements by the Stock
Exchange, and that this movement Is be-
Ing supported by Benjamin Strong. gov
ernor OF the Federal Reserve Bank of
New York; Charles II. Sabn. president
II the Guaranty Trust Company. and
executives of the Equitable Trust Com
panv.
Senator Owen said he feared that
without the adoption of fortnightly set
Elements the high banking rates here
compared with those in London would
prevent the expansion in commerce and
industry, and that New York would not
be able to assume the leadership of
finance over London. lie desires closer
cooperation between American, British
and French banks. The Exchange here,
he said, mus. afford an open market for
all securities.
Mr.. owen said he was especially in
terested in gathering data that will aid
him in advancing his bill, now in the
hands OF the Banking and Currency
Committee, for the establishment of a
Federal foreign exchange bank which
would have 00,O00.000 capital sub
scribed by the United States Govern
ment. He said this bank should func-
ton with dealers in foreign exchange
Just as the Federal reserve system func-
tons with its domestic bank members.
We are now entering upon gigantic
competition in foreign commerce." he
said, land there is need OF great expan-
sion in foreign txcnange facilities
The argument against the proposition
is that the Government bank handling
foreign exchange might interfere with
private business. Frank \. Nanderlip
expressed a similar opinion on the es-
Enlistment of the Federal reserve sys-
tom, but he overlooked the credit and
deposit eXpension that would ensue
The National Bank now has $500, 200, 900
more deposits than before the Federal
banking system was established. 1t is
believed that the Federal Foreign Ex-
change Bank would expand internal
tional exchange.
1T is true that the Federal reserve
system might handle this foreign ex-
change expansion through the Federal
Reserve Bank ~ New York, but II IL
obliged to contine It's attention to do
nestle business. I hold that a Federal
deserve Foreign Exchange Bank as n
separate institution would serve the pub
lie better. as it could engage a corps of
specialized experts" said Mr.. owen. He
took exceptions to Paul NJ. Warburg's
opposition to the Federal Foreign EN-
change Bank. and continued as follows
THE Bank of France is required by
its charter TO be the servant of the bust
ness interests of France. The Bank of
England functions under it's manage
fnent not as a money making bank. but
as the servant of the British manufac-
Iurer. producer and merchant. The
Bank of England during this war and
the London banks have furnished money
TO the British manufacturers and mer-
chants at 3h Ter cent. for the vital pur-
pose Of promoi ing the Industries and the
productive poI err of Great Britain.
The American banks should recog-
nize similar obligation: extend the use
o' acceptances at a rate as least as-low
as is allowed In London and encourage
commodity banking, -
For fifty years before the war France
and Belgium had n uniform rate of >
per cent. America must not overlook
this fact.
THE banks OF New York and the Fed
oral Reserve banking system should es-
tabllsh the most intimate, cordial rela-
lions with London and Paris, and New
York State should legislate to place Lon.
don bank agencies in New York and
make New York one of the great world
financial centers.
"A spirit Of true cooperation should
exist between the New York and Lon
Ion banks and both should function as
the servants OF commerce
London has n bi-weekly settlement
for those who handle stocks on the ex-
change. and the New York Stock Ex-
change, the New York banks cooperat-
ing should arrange without delay for a
bl-weekly settlement plan in order that
The funds now tied up on daily stock
loans may be released in part to more
FULLY accommodate commerce.
i have talked to a number OF leading
bankers who appreciate the importance
"t this action. 1t would be better for
tho Stock Exchange. banks and COM
MERGE
Banks which desire to function as
servants of commerce should not think
TOO lsrgely in terms of the daily fiuctua-
lions Of the Stock Exchange.
u understand that the high rate I'm
New York is regarded as necessary to
restrs in excessive speculation in stocks.
This alleged remedy is not justified"