The gazette-times. [volume] (Heppner, Or.) 1912-1925, 1914-08-27

In the ASSuCldllOus tdNil anu every
bank in such Association becomes
responsible in proportion to its cap
ital and surplus. In addition, there
is placed upon the issuance of the
currency a tax at the rate of three
per cent per annum if the currency
is outstanding three months, four
per cent per annum for four months,
and so on up to six per cent per an
mum if the currency remains unre-
deemed six months. Necessarily this
will limit the unwise and reckless
1t is needless to tell you that.
should the necessities of our COM
merce demand it, the Portland banks
and their associates will not hesitate
to take out all the currency needed
for the purpose of facilitating the
commerce of this section of the
country. Nevertheless, such circu-
lation will not be taken out unless
the pressure for its use becomes in
very great measure more severe than
it is today. 1t places liability up
on each and every bank in the Asso-
citation that bankers do not care to
undertake unnecessarily, and is is
sued at cost that must eventually
become severe burden on the COM
munity
One moving cause for the belief of
the Portland bankers that we should
go slow in issuing the Vreeland cur
rency is the fact that the Federal Re-
serve Act will shortly be put in op-
Grafton. The Federal Reserve Board
has now been organized, and they
are pushing forward rapidly the or
ganization of the twelve District Re-
serve Banks. I 1t is stated that by
October first these banks will be in
operation. If so, it will easily solve
any existing financial troubles and
be far less expensive to the borrow
er. AS you know, the Reserve Bank
of this District will be located in San
Francisco, but we are using every eff
fort to have a branch established in
Portland at as early a moment as
the parent institution in San Fran
cisco will permit. Should, however,
the establishment of the branch bank
be delayed more than is expected,
nevertheless we shall be able pos
sibly at some inconvenience, to
transact our business directly with
the San Francisco bank.
incidentally, wish to call the at
tention of the business men of the
community to one change that will
ensue in our methods of doing bus
mess after this bank is established
Commercial paper proper for dis
count at the Reserve Bank must
have fixed date of maturity, and in
terest must be taken out in advance.
1t is within the possibilities that
when the reserve bank is in opera
tion member bank will be able to
liquidate every dollar of it's COM
mercial paper, provided such paper
4 is of the proper character. That
means that a properly conducted
member bank cannot suspend or fail.
Now, the future. A man is fool
who attempts the role of prophet
but were | to venture such foolhard-
mess, should say that the next year
or two will see in Oregon and the
United States generally, due to the
misfortunes of others, such pros
porous conditions as never before
prevailed. In the end, however, we
cannot have such an enormous eco
} nomic waste as this great European
war seems likely to cause, without
materially affecting the ability Of
, those nations to purchase our ex
, ports. 1t is as if you had country
customer whose stock of goods was
, destroyed by fire and who wired yot
to replace the same at any price
, You might make handsome prof
on the first shipment but thereafter
, the country store-keeper would bt
so crippled that his purchases fol
some time to come would be mater
tally lessened So it seems to mt
will be the case with the nations O.
the world. The great nations of Eu
=, rope, by the destruction of life ant
, property, will not be able to buy thu
goods we have to sell. The resul
y necessarily will be stagnation ant
depression in business.
On the other hand, as an offset t.
: this forecast of the distant future, il
, the fact that by the war loss tina
comes to European nations there viii
be open to our enterprise the vas
. commerce of South America tha
now is tributary to Europe. Thi
should and will be diverted to ou
ports provided our merchants ar
;, alive to their opportunities. Thi
commerce may, in great measure
offset the loss of European business
= Then, again may come to ou
) country another great and valuabl
y gain in the establishment of Oh
Merchant Marine. Prior to 1861
the American Marine was the equa
= if not the superior, of any Marin
L. 81