W. J. Gilpin Elected Manager New York After completing nearly a quarter of a century of service as manager of the New York Clearing House Association Mr. William Sherer resigned from that position on July 1st and was succeeded by assistant manager Mr. William Jay Gilpin. Before accepting his resignation several members of the Clearing House Association paid warm tributes to the valuable services rendered by Mr. Sherer, who attains his 80th birthday next September. He will be continued on the payroll of the Association. Mr. Gilpin, the newly elected manager, has been connected with the Clearing House since 1877 and has been assistant manager since 1892 He is a trustee of the Brevoort Savings Bank and has served over ten years in the Seventh Regiment. Clarence E. Bacon, who was elected assistant manager, has been associated with the Clearing House since 1893 and has been chief of the collection department. The Farmers' Loan and Trust Company of New York City reports a gain of over $8,000,000 deposits in its June 30th statement as compared with the official return of February 28, 1917. Resources amount to $210,518,933. The capital stock was recently increased from $1,000,000 to $5,000,000. W. J. GILPIN RECENTLY ELECTED MANAGER OF THE NEW YORK CLEARING HOUSE STOCK MARKET AFFECTED BY WAR REVENUE LEGISLATION Trading on the Stock Exchange has been seriously influenced by the uncertainty regarding the tax on excess profits and Government price fixing. At first the changes made in the House War Revenue bill by the Senate Finance Committee were regarded as more favorable to corporate activities. But there is general doubt as to the wisdom of basing the tax on excess profits on the average earnings of corporations for the three years prior to the war. Banking opinion holds that the test of profits should be applied to the earnings since the beginning of the war as a means of arriving at a more cquitable basis for taxing war profits. The public also continues to hold itself aloof from the market, largely because of the prospect that Government price restrictions will relate not only to its own and allies' purchases of war material but will extend to industrial, manufacturing and production in general. Another adverse factor in the stock market, which has still further depressed the general list, is the inability of the railroads to secure proper consideration from the Interstate Commerce Commission. The partial increases in freight rates granted will be entirely inadequate to meet highly increased operating costs or enable the railroads to make a more favorable bid for capital. The expectation that the large semiannual dividend and interest disbursements would flow back into investment channels has not been realized. The prospects that domestic financing will continue to be held in abeyance is strengthened by the fact that the Government will continue to be a constant borrower and that expenses are rapidly coming to the point where the proceeds of the First Liberty Loan will soon be exhausted and another issue or additional amounts of short term treasury certificates will be forthcoming. For the month of June the railroad applications for new capital aggregated only $20,192,000, including the Baltimore & Ohio $15,000,000 note issue. Progress of Lincoln Trust Company, New York The June 30th published statement of the Lincoln Trust Company of New York gives the deposits at $15,843.726 with capital of $1,000,000, surplus and profits of $538,391. Assets total $17,566,451, inclusive of $2,676.792 cash in vault and in banks; $3,438,076 demand loans on collateral; $5,514,953 time loans on collateral; $2,300,253 bills purchased and bonds at market value. $2,093,777. New York City Splendid Team Work Between Government and Banks It may be only a war-time truce but the fact is none the less agreeable that for the first time since President Wilson's tenancy of the White House there has been genuine co-operation between Government agencies and the big banking and financial interests of this city in connection with initial war financing. For the time being, at least, the lion and the lamb dwell together in amity, although there may be some difference of opinion as to which is the lion and which the lamb. The result, however, has been to assure not only the complete success of the Liberty Loan operation but to keep banking and credits upon an even keel. Federal authorities are alive to the danger of any disturbance at this critical period to the delicate machinery of banking and credit. When the Liberty Loan was first announced there was a disposition on the part of the Treasury officials to continue the "holier than thou" attitude. But circumstances created a change of heart. Secretary McAdoo threw off his cloak of official reserve, came to New York and heeded the counsel of trained men of broad experience. The experiences of the past month must also. have made a profound impression upon the authorities at Washington in testifying to the patriotism as well as the genius of New York's big bankers. They have been taught to place implicit reliance upon the public spirit of Wall Street's leading men. Now that the ground plan has been laid for effective co-operation between the Treasury officials, the Federal Reserve Board and the bankers there is absolute confidence as to the ability of the Government to market future issues of war bonds without difficulty. The extraordinary strain imposed upon banks around July 1st by Liberty Loan payments, dividend and interest distributions aggregating $320,000,000 and heavy income taxes was quickly relieved by the redeposit of the proceeds of Liberty bonds in banks and trust companies; by the prompt release of additional reserves due to amendments of the Federal Reserve Act and receipt of further imports of gold from England. Stock and Bond Values Decline The best opinion in Wall Street holds that while huge Government war expenditures, estimated at ten billions for the ensuing year if the war continues, will make for a different kind of prosperity in spots only while in other lines of activity conditions will not be so favorable. Labor is also becoming more dictatorial in its demands especially in the mining regions. The consequence is that bankers are discouraging all stock speculation. Because of so many cross currents the average of fifty active railroad and industrial stocks on the New York Stock Exchange sagged from 82.60 at the close of June to 80.90 on July 7th, which is almost ten points below the high point this year in January and within five points of the lowest average of the present year. Bond values also reached the lowest average for the year on July 6th, the rate for forty standard issues on July 6th being 82.65 as compared with 89.48 in January. Big Deposit Gain by Central Trust Company As compared with the official statement of last February, 28th the June 30th statement of the Central Trust Company of New York shows an increase in deposits from $173,458,000 to $209,430,000, a gain of nearly $36,000,000 with an increase in total resources from $198,924,000 to $233,879,930. The resources include $104,823,000 loans; $78,673,000 cash on hand and in banks; $26,039,114 public securities at market value and $20,519,262 other securities at market value. Capital stock is $5,000,000; surplus, $15,000,000 and undivided profits, $2,514,683, the dividend payable July 2d being charged to profit and loss and not included in statement. The New York Liberty Loan Committee, composed of leading bankers and trust company officials, will continue in an unofficial and advisory capacity as a "money committee," to correspond with the "Exchange Committee" in London. The committee will also keep up organization work preparatory to launching the next war loan campaign. THE SEABOARD National Bank of the City of New York cordially and earnestly solicits accounts, active or dormant, from trust companies throughout the United States. Interest allowed. Its solicitation is based upon conservatism, service in all banking lines, excellent facilities, and the fact that its officers give their personal attention to all accounts. SURPLUS AND PROFITS, $3,150,000 S. G. BAYNE, President C. C. THOMPSON, Vice-President W. K. CLEVERLEY, Vice-Pre ident DEPOSITS, $50,000,000 J. C. EMORY, Asst. Cashier Money Market and Reduction of Legal It may seem anomolous that, notwithstanding the unparalleled demands upon banks and the money market incident to Liberty Loan, dividend, interest and income tax payments, the banking position of New York should emerge from the ordeal with apparently greater strength than it ever displayed before. Excess reserves at the close of the first week in July stood at the highest figure on record due to the reduction in the required legal reserves of central reserve city banks from 18 to 13 per cent. for demand deposits and from 5 to 3 per cent. for time deposits. The decrease of $239,000,000 in aggregate reserves reported July 14 was due to the new form of compilation, counting only legal reserves held in the Reserve bank. The change, not allowing for $110,000,000 in vaults of member banks brought the official excess reserve to the low figure of $36,000,000. It was this release of reserves together with the re-deposit of approximately $128,000,000 Liberty Loan funds in banks and trust companies of this district, against which no reserves are required and arrival of gold from Ottawa bringing total imports since the first of the year up to $514,000,000, which relieved the tension on the money market, after the closing of Liberty Loan subscription books. The transfer of the final instalments of member bank reserves to the Federal Reserve Bank of New York did not call for any material readjustment for the reason that nearly all the National banks had anticipated this requirement. The 6 per cent. rate for call loans in June and the advance in time and commercial paper rates was largely due to the reduction of the reserves of local banks, the Clearing House statement showing, for the week ending June 23d excess reserves of only $41,827,000. During the ensuing week the banks gained $62,987,000 in cash increasing surplus reserves to $104,814, 320. By the end of the following week, after the change in reserve requirements became effective, the surplus stood at the highest point on record, namely $278,453,000. Due to elimination of reserves held in banks as legal reserves, bringing excess reserves to the low figure of $36,000,000 on July 14, and also to heavy Government deposit withdrawals many rates advanced to 10 per cent. Subsequently call rates again declined to from 3 to 6 per cent. The weekly statements of the New York Clearing House banks and of the trust companies show: Fidelity Branch U. S. Mortgage and Trust The work of remodeling the Seventy-fifth Street branch of the United States Mortgage & Trust Company, formerly the Fidelity Bank, recently absorbed by the trust company, has just been completed by Hoggson Brothers. The entire first floor quarters have been enlarged and re-arranged to provide increased officers' space and a retiring room for women patrons. The decorations throughout are in white and grey, giving a very pleasing effect. The basement has been remodeled to provide increased facilities for the United States Safe Deposit Company. The United States Mortgage & Trust Company has also let a contract to Hoggson Brothers for making improvements to its branch quarters at Broadway and Seventy-third st. Important Changes in the Federal Reserve Act The new amendments to the Federal Reserve Act are designed to increase its power and to broaden its scope. They affect, among other things, bank and trade acceptances, the issue of Federal Reserve notes, the reserves of member banks, and the admission of state banks and trust companies to the Federal Reserve System. A booklet containing a digest of the law as amended, together with a synopsis and the full text of the recent amendments, has just been issued by this Company and may be had on request. Guaranty Trust Company of New York |