The Union times. [volume] (Union, S.C.) 1894-1918, 1914-10-30
FEDERAL RESERVE BANKS
WILL BE ESTABLISHED

Washington, Oct. 25.-The ~ fed
eral reserve banks of the new bank
ing system will be opened for busi-
ness November 16. This was official
ly announced today.
Secretary McAdoo, authorized by
the currency act to name the opening
date, made the announcement. His
choice of the 18th was made despite
the recent recommendation of the di-
rectOrs and governors of the II banks
against opening before November 30.
Mr.. McAdoo declared he had reach
ed his decision after discussion with
the federal reserve board and because
of emergency conditions in the South.
He believes the opening of the banks.
especially helpful there, will benefit
business in all sections.
In a statement tonight the secre-
tary made it clear that under the new
system the federal government will
be able by deposits from the general
fund of the treasury in reserve banks
to aid producers of staples. The new
reserve requirements, he pointed out,
will relieve more than S4OO, 900 600 of
money now held by national banks as
reserves and will greatly add to the
loaning power of the banks.
The statement in part follows:
II have determined to announce the
10th of November, 1914, the establish
ment of the federal reserve in all fed.
eral reserve districts. On that date
the new reserve requirements for ma
tional banks, as prescribed bv the ac-
ton will become operative
Emergency Conditions.
81 am impelled to this decision par
ticularly because of the emergency
conditions in the South and the con-
fldent belief that the prompt open
ing of the reserve banks will be very
helpful to the cotton situation and to
general business in all sections of the
| country.
This conclusion has been reached
after thorough discussion with nv
associates on the federal reserve
board who are cooperating cordially
with me, and also after full consdera-
ton of the views expressed by the di-,
/ rectors of the federal reserve banks
at their recent conference in Wash
lngton with the federal reserve board.
Il am fully aware of the physical
difficulties that must be overcome to
set the reserve banks in motion on the
10th OF November, but the directors
of these banks represent the highest
degree of American banking ability
and | am sure that not only can they
meet the situation but that they will
cheerfully take up the task IN the
same fine spirit of public service
which animated their discussions at
the WASHINGTON conference
| "As the result of the enactment of
the war revenue measure the party
between receipts and disbursements
of the treasury will soon be happily
restored. This will make it possible
for the treasury to render still great
er service than it has already render
ed IN helping the financial situation in
the South and in other parts of the
country where the need has appeared.
The prompt opening of the federal re-
serve banks will make the assistance
of the treasury doubly powerful ne
cause the federal reserve act author
ICES the secretary of the treasury, in
his discretion, to deposit a large
amount of the moneys held from them
in the general fund in the federal re-
serve banks and to require such banks
to act as fiscal agents of the United
States and also in his discretion to de-
poslt the revenues of the government
or any part thereof, in the reserve
banks and to make disbursements bv
checks drawn against such deposits
Can't Scatter Fund.
Under the present system the sec
rotary of the treasury can not with
prudence scatter the general fund of
the treasury among the great number
OF widely separated national bank
throughout the country. Up to the
| present time | have gone as far in
that direction as | have felt it was
wise to go, but with the larger powers
conferred by the federal reserve act
and the use which | may be able to
| make of the federal reserve banks as
| hscal agents of the government, it
Will be prudent and wise to deposit
large amount of the general fund
OF the treasury in federal reserve
| banks.
AS soon, therefore as the reserve
| banks are in operation | shall trnl
| fer to them as large an amount of
government funds as possible; this
| VIII, IN turn, enable them to extend
enlarged credits to national banks
and State banks which may become
| members of the federal reserve sys
| tenn, which they, in turn, may extend
to their customers. By this mean,
and through the agency of the federal
reserve association | hope to give ad-
| dltlonal assistance to the cotton pro
durers, the cotton industry and the
business men of the South.
Ihe new reserve requiremnts,
| winch Will become operative on the
10Th day of November, will release
more than $400,O00,0O0 of reserve
money and largely increase the credit
facilities of the banks of the country"
CITROLAX! CITROLAX.