Show WEEK fOR YORK of Business Saturday Noon No n Found Fo nd All the Great Banking Institutions Intact Withdrawals of Cash C Continue but the Atmosphere I Is Expected to Be He Clear Monday tew ew York Oct 6 GIn In to a quest of the tho Associated Press as to toIs tois pis Is view of the present situation J P Morgan said today i As s I have already said suki I cannot too emphasize the importance of people eople 1 realizing that the greatest in inJury Injury Injury Jury that can be done in the present pre ent situation is IH the thoughtless withdrawal of funds from banks and trust com coin companies companies and then hoarding the cash In safe eafe deposit vaults or elsewhere thus withdrawing the supply of capital al always always always ways needed in such emergencies as a that which has been confronted dur during durIng durIng ing the past week James Stillman president of the Na National National National City bank who next nest tet tc Mr Ir argan has ha done more to bring out a aution ution lutton of the financial difficulties in New York than any other man said Soundness Demonstrated The wise and heroic action of the secretary of the treasury and the spen splendid splendid did efforts of Mr Morgan with the as assistance assistance of the clearing house have hare demonstrated the sound financial con condition condition dillon of the clearing house banks of this city eft Now however in tn order to facilitate the shipments of cotton grain tobacco and other products and to facilitate the imports of gold the associated banks have wisely decided to combine their credit by the issuance of clearing house certificates and thus prevent the paralyzing of a very large part of the business of the country Withdrawals Continue Calmness and growing encourage encouragement encouragement ment were the dominant features of the tho financial situation when the great banking institutions closed their week today with all the great financial in institutions Institutions of the city intact after hav hay having havIng hayIng ing met their unprecedented demands of the past week With this signal demonstration of the resisting poy rs of or the banks came the adoption of flew few and important measures to prevent a recurrence of acute strain Although the tile stock exchange and other sensitive sen points were free from extreme agitation agItation agitation tion yet there were heavy withdrawals of cash from several se ra banks and trust companies these withdrawals being bein for forthe forthe forthe the most part by the smaller deposit depositors ors All AU the institutions affected con continued continued continued to pay payout out on demand up to noon the usual hour of closing on Sat Saturday Saturday Saturday Loan Certificates First of Importance in the remedial measures was that of the ring house association in voting T Issue clearing house loan Joan certificates for the use of the banks themselves In settling their daily dally balances at nt the clearing clearinghouse clearinghouse clearinghouse house These certificates will not get into general circulation but their use will enable the banks to keep In circulation circulation lation for far the needs of general business large amounts ts of currency which other otherwise otherwise otherwise wise would be required for the settle settlement settlement settlement ment of o the daily dally clearing house bal balances balances ances Plans were formulated to extend the benefit of clearing house certificates to the trust companies as well as to the banks bonks which are at present pres nt members of ot the tho clearing house association Another extremely Important feature of ot news was the announcement by the National City bank that It had engaged in gold for Import Inu ort It Itis ItIs ItIs is believed by bankers and exchange brokers that this engagement Is the be beginning beginning beginning ginning of what will wm probably be a continuous movement of o gold to New NewYork NewYork NewYork York from abroad The exchange mar market market market ket Is very favorable for tor the importation tion of or gold and it is believed that no difficulty will be met with within in securing the metal from Europe so far as may maybe maybe maybe be needed The clearing house certificates will willbe willbe be to those banks making application application cation and proving to the satisfaction of the committee appointed for the purpose the need for the certificates and their ability to deposit the proper collateral No limit Umit was fixed to the amount to be issued but it is hoped that the amount asked for will be small Trust Companies Declared In Another step was taken also of first importance designed to offset the un unfavorable unfavorable unfavorable favorable effect which might be pro produced produced by b the fact that the clearing clearinghouse clearinghouse clearinghouse house banks were in a position to ob obtain obtain tain tam certificates while the trust com corn companies companies were left out of the arrange arrangement ment The fear that the trust compa companies companies companies nies would be unfavorably affected by such a decision derision was as one of the in which led several severa members of ot I the clearing house committee to op oppose oppose oppose pose the issuance of certificates e The step taken to offset this danger was ivas the presentation of a resolution by the clearing house committee to members of tho the association to the effect that trust companies should be admitted to the clearing house It was provided that this resolution might be consid considered considered ered cred at of the association to tobe tobe tobe be held hereafter Thus far there have been no applications by the trust com corn companies companies for admission to the clearing clearinghouse clearinghouse clearinghouse house and amI the exact conditions on which they might be admitted have hav not been fixed fired The requirement made from banks admitted to the clearing clearinghouse clearinghouse clearinghouse house is ts that they shall sha keep In ln their own vaults a serve reserve of 25 per cent of their deposits This is a larger reserve than most of the trust companies have carried since the requirements of the law of 1906 did not go beyond 10 per percent percent percent cent in cash on hand or on deposit in other banks One Danger Removed While the action taken today is ts not immediately effective so far as It re relates reale relates lates ale to trust companies it shows a willingness of the clearing house banks to cooperate with the trust companies which greatly relieves the situation and removes the danger which some have feared that each individual trust com corn company company pany would be left to shift for itself while the associated banks in the tho clear clearing clearing ing lug house stood firmly together It is felt feU by conservative bankers that un under under Under der present conditions It will not be prudent to pursue a narrow policy and It if it is necessary to bring the import important important important ant trust companies into full fu fellowship with the clearing house it will be done The clearing house certificates au authorized today will be issued in sub substantially the tho same form as those au authorized authorized authorized from down to 1893 1803 Banks desiring to obtain the certificates will willbe willbe willbe be to present their applications applications applications to a loan Joan committee which will consist of the regular clearing house committee with the addition of five other bank officials who are experts in inthe Inthe Inthe the judgment of f the tho credits credith and In dealing with banking matters These additional members are James G Cannon vice president of the Fourth National bank Henry P Davison vice president of the First National bank Walter E Frey vice rice president of the Corn Exchange bank Gates W McCarran president of the Mechanics National bank Deposits Required When en a bank satisfies this commit committee tee that clearing house certificates are needed and the request is granted the tho bank will be required to deposit first class bills receivable or other good cot col collateral co lateral and will receive 75 per cent of the ascertained market value of such collateral in clearing house certificates These certificates will wUl be b accepted In all aU settlements of debit balances against the bank at the clearing house The effect of the is Issue ie of the certificates certificates cates will be to leave the cash reserves of the bank unimpaired so far as the tho demands through the clearing house I Iare are concerned and will wUl thus offset the heavy drain which might be imposed upon some of them if largo large checks withdrawing deposits turned up against them in the clearing house settlements The effect of the decision to issue clearing house certificates has usually been to restore confidence to a large degree and thereby to diminish the pressure which might logically be an anticipated anticipated anticipated in view of ot the previous de demand demand demand mand for currency The cash left free In the banks will then be available to toa toa toa a larger extent to meet the ordinary demands for currency from deposits The largest issue of certificates up to the present time was in 1893 when the total output was and the maximum outstanding at any anyone one time was The first Issue was made In that year on June 21 Just lust be before before before fore the announcement that the gov gor government government of British India had suspend suspended ed the free coinage of silver and fear spread that it would be impossible to maintain the value of the silver sliver dollar doar Largest Gold God Stock in World No such menace faces the money market at the present time and under the operations of the gold standard law Jaw the accumulation of gold in the treasury including that held against gold certificates now stands at which 19 is the largest gold stock In the world It is not believed that the demands of the present occasion for certificates will be large arge The Tue T e clear clearIng clearIng clearIng Ing house banks showed today specie holdings of of which nearly Continued on Page 2 STRENUOUS WEEK FOR NEW YORK FINANCIERS Continued from Page Pago 1 all was In gold and legal tender hold holdings holdIngs holdings ings of These Items showed a decrease of In the bank statement of ot to today today today day as compared d to that of ot a week ago but the total reserve stood at which was only below the legal requirement of 25 per cent While a decline of the reserve below the legal limit Is always a subject of remark it is not Infrequent during the season and still leaves so large a fund of cash at the command of the banks that under ordinary con conditions conditions conditions this would not excite any un uneasiness uneasiness Uneasiness easiness The Indications are that the cash reserve of the associated banks will be kept substantially intact here hereafter hereafter hereafter after by the importation of gold Fall In Exchange The sharp fall in exchange yester yesterday yesterday yesterday day which made importations of gold golc possible at a profit was not modified today It resulted in the announce announcement announcement ment meat by the National City bank of or the engagement of ot of European continent and South American anc and rumors of or other engagements of the yellow metal The large credits cre created created In favor of ot the United States Stites by bythe bythe the movement of crops and to some I extent of securities which have been I taken over at the present bargain prices will enable this country to t Im Import Imp import p port rt gold In considerable amounts without resorting to the sale of ot finance bills bUls The disposition of European banks to curtail the acceptance 01 of finance bills during time tile last few months Is having at least one good effect that there are but small obligations of ot that kind to be covered at this time and hence the credits established by bythe bythe bythe the movement of crops can only be met by b the shipment of gold to this coun country country country try If It the Bank of England decides to raise mise the discount rate at the regu regular regular lar Jar board meeting next Tuesday or I earlier this may maycheck check to some degree I Itile the tile movement of gold toward New NewYork NewYork NewYork York but as the English bank reserves Is now large there are indications that the Bank of England will not Interpose serious obstacles to the relief of the American Am rican market Statement Secretary of the Treasury Cortelyou caused the following statement to be given out tonight On the occasion of ot a call caU on him this morning by representatives of the New York clearing house Secretary Cortelyou asked that they convoy to the clearing house his deep appreciation tion on behalf of ot the government of the courageous and manner In which they had upheld the interests not only of the city but in a sense o othe of the people of ot the whole country count Later Secretary Cortelyou called on JiP JP Morgan and expressed in similar terms his appreciation of the services rendered by Mr lr Morgan and all who had cooperated with him in meeting the emergency The subcommittee of the directors of ot the Knickerbocker Trust company who are hoping to bring about a re cc resumption of business of the company met inet in iii executive session today After the meeting Mr Davies counsel fo for forthe forthe the company compan said The committee met and after a dIs dIscussion discussion decided upon a plan of ot reorganization with the end In View lo of ot re resuming resuming suming business This plan will be ad advertised in detail as a paid advertise advertisement advertisement ment meat in the Monday morning newspapers pers This T S Is to insure its accuracy I and also its authenticity 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