change, or other obligations; to mortgage, pledge, and hypothecate any stocks, notes, bonds, or other evidences of indebtedness, and any other property held by it; and to lend money, with or without collateral security.

To aid by loan, subsidy, guaranty, or in any other manner whatsoever, any corporation whose stocks, bonds, securities, or other obligations are in any manner, either directly or indirectly, held or guaranteed; to do any and all other acts or things toward the preservation, protection, improvement or enhancement in value of any such stocks, bonds, securities or other obligations, and to do all and any such acts or things designed to accomplish any such purpose.

To carry on any business or operation deemed advantageous, which is incidental or accessory to any of the powers or purposes herein before specified; to acquire, use, undertake, manage and dispose of contracts, properties and rights of all kinds, including the assets, franchises, business, good-will and liabilities of corporations, associations, firms and individuals, and to give guarantees in respect thereto; and, generally to do anything that a natural person might lawfully do or cause to be done in connection with any of the said things.

Nothing herein contained shall be construed as authorizing the business of banking, nor as including or authorizing the exercises of any business or powers of a moneyed corporation, or a corporation provided for by the banking, the insurance, or the railroad laws, or of an educational institution or corporation which may be incorporated as provided in the education law, nor as authorizing the exercise within the State of New York of any of the business or powers of a corporation provided for by the transportation corporation law, nor as authorizing, or intending to authorize, the performance at any time of any act or acts then unlawful.

Third-The amount of capital stock of the corporation is fifty million dollars ($50,000,000), of which one million dollars ($1,000,000) is preferred stock, to be known as "managers' shares," and forty-nine million dollars ($49,000,000) is common stock.

The preferred stock shall be entitled to receive out of the surplus profits dividends at the same rate as that paid on the common stock until the dividends aggregating seven per cent. (7%) shall have been paid or declared on both classes of stock during any one year.

Thereafter, the preferred stock shall be entitled to receive one-fifth (1-5th) of any further distribution of surplus during that year, and the common stock shall be entitled to receive four-fifths (4-5ths) thereof.

Upon the liquidation of the corporation and the distribution of its assets, the preferred stock shall be entitled to receive an amount equal to the par value thereof, before any distribution shall be made to the common stock, which shall be entitled to receive out of the assets then remaining an amount equal to the par value thereof; after which the preferred stock shall be entitled to receive one-fifth (1-5th) of the as

sets, if any, then remaining undisturbed, and the common stock shall be entitled to receive four-fifths (4-5ths) thereof.

Fourth-The number of shares of which the capital stock shall consist is five hundred thousand (500,000), of the par value of one hundred dollars ($100) each. The amount of capital with which the corporation will begin business is three thousand dollars ($3,000).

Fifth-The principal office of the corporation is to be located in the Borough of Manhattan, City, County and State of New York.

Sixth-The duration of the corporation is to be perpetual. Seventh-The number of directors of the corporation is to be twenty-four (24). Directors need not be stockholders. As soon as practicable, the directors shall divide themselves into four (4) classes, each of which classes shall consist of six (6) directors. Each of the directors of the first class shall hold his office for one (1) year, or until the next annual election: each of the directors of the second class shall hold office for two (2) years, or until the second annual election; each of the directors of the third class shall hold his office for three (3) years, or until the third annual election; and each of the directors of the fourth class shall hold his office for four (4) years, or until the fourth annual election. At each annual election the successors to the class of directors whose terms shall then expire shall be elected to hold office for the term of four (4) years, so that the term of office of one class of directors will expire in each year.

The eighth section contains the names and addresses of the directors for the first year.

The ninth section contains the names and addresses of the three incorporators.

The tenth section contains "provisions for the regulation of the business, and for the conduct of the affairs of the corporation."

The following is an official statement:

The company is organized for the purpose of doing an international business and establishing trade relations with different countries which will help make a world-wide market for our products; for financing and promoting the development in foreign countries by American engineers of great public and private undertakings; for assisting in financing the rehabilitation of industries in foreign countries and for the purpose of undertaking such domestic business as seems advantageous in connection therewith.

The charter confers wide powers. The company may buy and sell all varieties of domestic and foreign securities. It may contract with domestic or foreign governmental bodies for franchises, concessions and so on. It may explore for mines or other riches of the earth, manage and own them. It may engage in agriculture or carry on a general mercantile business in any part of the world. It may build and operate hotels, restaurants, shops, parks and other places of entertainment.

Also the company may promote and build telephone and telegraph systems in any part of the world outside of New York; build and promote gas, electric light and power works, water works, dams, flumes, water courses, aqueducts, sewage, drainage and sanitary works, wharves, piers, dry docks, basins, tugs, warehouses, oil tanks and other terminal facilities, and make investments in and carry on all kinds of mining, manufacturing, irrigating, agricultural, stock raising, real estate, mercantile, commercial, industrial, engineering and development enterprises.

This corporation may reach an importance in its influence on American trade comparable with that which the East India Company exerted upon the development of England's Asiatic possessions, or that which the Hudson Bay Company has had upon the development of Canada.

The new venture is the most ambitious attempt that has ever been made among the ranking nations in world commerce and finance. Its purpose will be to carry American capital into foreign fields, and to open the markets of the world to machinery, clothing and foodstuffs. It is an outgrowth, in a way, of the European conflict, which means the withdrawal of capital that has been supplied by Great Britain, Germany and France.

In making plans for the new company effective the National City Bank's branches recently established in Argentina, Brazil, Uruguay and the West Indies, together with the sixteen foreign branches of the International Banking Corporation, control of which was recently obtained by the National City Company, will play an important part.1

1England's preeminence as the world's financial market has been due largely to the service performed by the English acceptance houses, and to the existence of an active discount market for bills on London originating in all parts of the world. Exchange on London has been the means of settlement of transactions in international commerce for years, with the resultant large profits to English bankers. These English banks have an aggregate capital and surplus of $60,000,000 and total deposits and credits in accounts current of over a quarter of a billion dollars.

The most important British institution has paid dividends of 20 per cent. annually for many years. This is the London and River Plate Bank, which was established in 1862, and has now a paid-up capital of $9,000,000, with about thirty branches, including subsidiary banks in Brazil, Chile and Peru. The other British banks, while paying smaller dividends, have all established themselves firmly. England and Germany have put into Argentina, Brazil and Uruguay in the last twenty-five years approximately $4,000,000,000, and as a result enjoy together 46 per cent. of the total trade of these three countries.

As has been stated in the article entitled "Dollar Exchange," by the force of circumstances growing out of the most momentous upheaval in the history of civilization the whole structure of our commercial prosperity is changed. From a borrowing nation dependent upon others for capital to develop our natural resources or industrial expansion, we have become the lending nation, giving now out of our earnings the capital to supply the warring nations during hostilities. When peace comes, we will furnish not only the capital as well as the material for the industrial reconstruction of a war-scarred continent.

The benefits to our industries may be exceptionally great. If this undertaking is a success it may result in an achievement, to use a figure of speech, twenty-five thousand miles round and eight thousand miles in diameter, the size of the earth. The American investor will have an already mobilized financial force of a new character. It will give employment to thousands of American workers. It will increase the value of all the products of the United States and in this way stimulate land values. A railroad in a foreign. country built by American capital obviously will be built by American engineers and constructed probably of American steel. Today the city of New York is the largest city in the world and it, not London, Berlin or Paris, is the money center of the earth. We are no longer an isolated continental nation, but a world power. We have interests in the Philippines, Hawaii, Cuba, Puerto Rico and other islands, as well as in Canada and Mexico. We must be prepared to protect such exceptionally large interests. While the inhabitants of Europe are engaged in warfare we have a chance to commercially conquer to a very substantial extent the rest of the world.

THE GOLD NOTES OF THE MEMBER BANKS

December 25, 1915, the New York Federal Reserve Bank reported $85,820,000 federal reserve notes outstanding; $140,000 of this note issue was secured by commercial

paper. Practically the entire sum is based on gold and lawful money and the notes represent gold certificate circulation.

The reports of the twelve regional reserve banks embracing the whole United States showed that for the week ending December 17, 1915, bills discounted and bought amounted to less than fifty-four million dollars, and the net amount of federal reserve notes outstanding was less than fifteen million dollars. This, considering the power of expansion inherent in the federal reserve system, is an insignificant showing, but it is gratifying as indicating that the banks of the country are able to take care of the needs of the federal reserve system for help. Of the bills discounted and bought mentioned above only thirty-three and one-half million dollars represented commercial paper, and about nineteen million dollars bankers' acceptances.

The federal reserve system is not only a bank of reserve; it is also a bank of issue. It is to be classed, therefore, with other banks of like character, such as the Bank of England and the Bank of France. The stability of these great foreign banks has been based on the fact that their note issues represented gold deposits and gold redemption. The same applies as far as redemption is concerned to the federal reserve notes and there is no objection to the plan, which member banks are now following, of taking out circulation against what amounts practically to gold deposits.

FEDERAL RESERVE BOARD MAY COMPEL MEMBER BANKS TO SUBSCRIBE TO ITS CHECK CLEARING PLANS AND STRENGTHEN THE RESERVE SYSTEM BY

RELEASING FUNDS HELD BY

SMALL BANKS

December 27, 1915, the Attorney General was asked for an opinion by the Federal Reserve Board as to the extent of its authority to compel member banks of the reserve system to subscribe to the check clearing plan of the board.