Evening star., 1938-09-14
AMERICA BRACED
FOR WAR SHOCK
Business and Finance Now
Better Equipped to Check
Turmoil.
BY the Associated Press.

NEW YORK, Sept. 14.-American
business and finance Is prepared to
meet the shock of general European
war, IN the opinion of leading Wall
Street figures and governmental fiscal
authorities canvassed today.
Cautious comparison of the United
States business and financial world of
today with that of 1914 led to the
unanimous opinion of those consulted
that this country is much better pre-
pared, In manifold ways, to meet and
weather that shock than it was "a
years ago.
President William McC. Martin OF
the New York Stock Exchange said
before the regular opening time that
there was no intention of closing the
exchange on the basis of current in
formation from Europe.
His confidence and that of others
consulted was reassuring to those
troubled by the volume of selling at
the close of trading yesterday, which
forced leading issues down ST. to s6 a
share and which continued in even
greater force after the New York
close in the San Francisco market.
Repercussions Forecast.
Businessmen throughout the coun-
try asking what would happen to
American business and finance in
event of general war in Europe may
find the answer in the following sum-
mary of Wall Street banking and gov
ernmental opinion:
/. A general European war proba bly,
would be an immediate shock to the
financial and business world, as it was
in 1914
2. The American financial system is
infinitely better equipped to brace it
self and stand up under that shock
than 1t was In 1914. Adequate ma
chinery now exists for swift and ef-
fective handling of every financial
crisis likely to arise. Furthermore,
the impact Of the shock has been at
least partially softened by anticipa-
tion-a condition which did not exist
In 1914.
3. American business and agricuI-
ture probably would not receive an
immediate setback Of the severity of
that in 1914 and probably would not
pocket poofits Of the scale of 1916
1918, because Of four factors: The
vastly greater advance preparation
for war today, the deprecated credit
status OF jor European nations, the
neutrality laws and the johnson Act
IN yl,,o ~
have defaulted on previous oblga-
tions. In the end. popular sentiment
is expected to determine the effective
ness Of these elements-a factor COM
pletely unpredctable today.
Finance Vastly Changed.
Far-reaching fundamental changes
have been made in the United States
financial system since 1914.
The Nations gold reserves exceed
$4,000, 100000.
Excess reserves of Federal Reserve
System member banks AMOUNT to
nearly 100000. .o0O-a sum capable
Of manifold expansion to meet credit
demands as they arise.
The currency and credit system is
thus, and by reason of number of
other factors, capable of swift ex-
pansion to meet almost any con-
ceivable domestic requirements which
might follow outbreak Of war.
Federal deposit insurance forestalls
the likelihood Of the uneasiness which
played part in the anxiety of deposi-
tors in 1914, when almost anybody
could run bank.
The ratio of gold to foreign re-
quirements is satisfactorily high to-
day. and. in addition, Government
control Of gold prevents a situation
which might otherwise get out Of
hand
Foreign short-term assets, bank de-
posits and brokerage balances today
are estimated at around s2Oo0,0O0,-
900. Foreign holdings of United