The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-16
WAR FINANCE TOBE
TOPIC FOR BANKERS
Convention Will Meet in Chi
cago Sept. % to Discuss
Situation.
WOULD EXTEND RESERVE
Many Want Moro State Insti.
tutions Added to System to
Increase Strength.
WOULD EXTEND RESERVE
ny WILLIAM JUsTUs BoIEs.

ny WILLIAM JUsTUs BOIEs.
What promises to be the most I'M
portant convention OF bankers ever held
In this country will meet In Chicago
September ~ 10 consider the extraordi-
nary problems that have arisen in con-
nection, with financing the war, the eff
fort to curtail credits and the bring
ing into the Federal reserve system OF
the 80 per cent Of the country's bank
ing resources which has not yet been
modified under the Federal service.
Since Chicago In the nerve centre OF
the country banking system. hundreds
Of country bankers-always tho most
interesting contingent-wffi participate
in the proceedings. When the Ameri-
can Bankers Association last met in
Chicago. nine years ago. 1000 bankers
we're in attendance. Since then 5000
banks have joined the organization.
which to-day has a membership Of
$4,000.
As the delegates will rush homo TO
canvass. the whole scheme Of Govern
ment financing will be gone over with
the idea Of formulating the most prac-
teal plan for placing the bonds direct
with the people. Bankers everywhere
consider this Of supreme Importance,
since the banks arc making such I'm
mense advances to the Government
through fortnishtly purchases Of Treas
ury certificates OF indebtedness that Il
will be impracticabie for them to act as
the sale Of the Governments long term
securities.
Reach People Direct.
It will be. therefore, quite as inn
portant for the banks as for the Treas
ury authorities to place the Liberty
Loans with the people direct in such
way that they will stay placed" The
banks realize. however, that with $to,-
900, 100000 of Liberty bonds In the
hands Of 100000 holders there must
be constant shifting Of these invest
ments. But the thing that they are
trying to guard against is having large
holdings Of bonds taken by the country
banks for permanent Investment.
An EFFORT will be made, however. to
get the country banks to do their full
duty in helping the Government finance
its war expenditures. In the past this bur
den has fallen disproportionately upon
the large city institutions. as the ''num-
Der Of banks refraining from doing their
duty" AZ the Federal Reserve Board
says. 'is unduly large" Since these
short term borrowings by the Govern
nent will be continuous. It Is important
that not only the l4.779 banks which
subscribed for the second offering Of
'75O.o00,000 OF Treasury certificates of
indebtedness should support the ISSUE
but that the $4,000 other banks and
trust companies Of the country should
do their part as we'll.
The Chicago convention will seek to
impress non-supporting banks. there
fo'e, with their duty in taking their
portion Of the certificates. which pay
only 4ia per cent. when the general
market is bidding s per cent This
subject will be handled without gloves,
and the probability Is that there, will be
greatly increased sales OF Treasury GER
tifcates in the districts served by the
Federal reserve banks OF Richmond. At
anita, Dallas and San Francisco. which
made relatively the poorest response to
The Treasury's second offering.
Banks Ready to Cooperate.
X ever the banks were In the mood
Tor adopting the brotherhood idea they
are to-day. The vicissitudes OF the war
period have made them realize as
nothing else has the need Of pulling
together in everything. This is why an
unusual EFFORT will be made at Chicago
70 bring into the Federal reserve sys-
ZEN those State banks which have per-
sisienly refused to apply for member
IMP. The feeling is strong as to the
reed OF unitying all banking forces in
III effort to safeguard the country's
Se'd reserve and in protecting the
no - market from the disturbance
Wa''n would ordinarily arise during
periods OF unprecedented war financing
several strong speakers will empha-
~" mis- DSod. so as TO strengthen the
whole Feasral reserve system in prep
MauoH fo. Government loans and new
Fe1eral taxes. The convention Is ex-
peiten to go on record as favoring the
cIedlt curtailn1ent policy proposed by
Inc Federal Reserve Board during the
war period
From the tenor of the advance dis
cGss'ons II is evident that the question
O. Iredit curtailment Is giving bankers
g.. where much difficulty. This Is be-
cue the lending methods of the in
,'ior are quite unlike the practices of
n,troWers in the three central reserve
IN"S OF New York, Chicago and st.
.'oNls. Many loans previously made for
reproductive enterprises cannot be
''ed out, or greatly curtailed. without
''pos!hS great hardship upon the bor-
lovers.
I7e probability is therefore that no
attempt will be made to follow a hard
ana fast rule, since 1t would be imprac-
,liole TO frame a rule which could
- ,etn the borrowing operations of
''4c.E separated communities. The
.o'0inE convention will afford the first
Opportunity that has arisen for the
N2iey Changers of various sections to
''mpare notes on this subject At the
stw" time the bankers realize that their
.'"'' with reference to new loans must
'- very largely controlled by the i'm
e"4!ng Government borrowings and
W. knowledge that this burden must
increase as the war progresses.
To ConSid"- Loan Committe
ne great eou,rntion Is likely to in
c..s' the work OF the Capital Issues
'."mlttcs ana give it's opinion as to
'r'n"F or not 1t would be practicable
BE- 'N' committee 10 supervise all lend
operations in which loans OF $780,
or more figure. Many bankers are
s'".as l'Rht as TO the probable effect
on business in general OF any such
Jf0lcncnt.
''"nkers are keenly interested in that
.N.pn of the proposed revenue law
10 adds a per cent. tax upon the
n's'rsbuted income OF corporations II
't' feature is retained lending methods
hs' be radically changed in all cases