The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-10-26
HE EXPECTS TO OVERCOME
PHYSICAL DIFFICULTIES
Means That Vast Flood of Gold
Will Pour Over
Country.
SOUTH TO PROFIT LARGELY
More Than. $4,000 100000 VIII Be
Released and Made Avail
able to Business.
Especial TO The rimes-Dispatch.l

of gold will pour over the country
within the next three weeks.
Secretary McAdoo officially an
nounced tonight that the gigantic
Federal reserve bank system will open
on November 16. With the twelve
banks open. more than $500, 900. the
secretary says. will be released from
the mints and made available to the
country's bankers.
nation of the scheme worked out hero
during the last week for the $685.
100000 cotton pool, will put in call
more than s6oo.ooO.000 now tied up In
government or private vaults.
Mr.. McAdoo declared he had reached
decision after discussion with the Fed
eral Reserve Board. and because of
emergency conditions In the South.
He. believes the opening of the banks.
especially helpful there, will benefit in
all sections.
In statement tonight. the secre-
tary made 1t 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 re-
lease more than S40o,0oo,000 of money
now hold by national banks as reserves
and viii add greatly to the loaning
BANKS WILL REa,EvES
SITUATION IN SOUTH
The opening OF the reserve banks. the
secretary OF the Treasury points out,
should aid them to relieve the tight
ened cotton situation In the South In
its larger aspect, 1t is calculated here,
IT Will go long way toward aiding
the plan OF government backing In the
International exchange. for which Sir
George Palsh, tho English representa-
tive of exchequer, Ead the American
bankers, ,haYa- beaas working. sS.sS., :
In his statement Mr. EMcAdoo says:
II have determined to announce on
the 9th day of November, 1914. the es-
tablishment of y the Federal reserve
banks in all the Federal reserve dis
tricts. On that day the new reserve
requirements; for national banks, as
prescribed by the act. will become
operative. IS
II am impelled to this decisioN par.
ticularly because of the emergent con-
ditfons in the South, and the confident
belief that the prompt opening Of the
reserve banks VIII 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 my
associates on the Federal Reserve
Board, who are cooperating cordially
with me. and also after full considera-
tion OF the views expressed by the di-
rectors of the Federal reserve banks
ut their recent conference In Wash
ington with the Federal Reserve Board.
II 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 de-
gree OF American banking ability, and
l am sure that not only can they meet
The situation, but that they will cheer
fully 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 parity
between receipts and disbursements of
the Treasury will soon be happily re-
stored. This will make 1t possible for
the Treasury to render still greater
service than it has already rendered In
helping the financial situation in the
South and in other parts of the country
where need has appeared. The prompt
opening of the Federal reserve banks
will make the assistance of the Treas
ury doubly powerful, because the Fed
ernl reserve act causes the Secretary
Of the Treasury, In his discretion, to
deposit n large amount OF the moneys
held in the general fund in the Fed
=
banks to act as fiscal agents of the
United States; and also. in his discre-
tion, to deposit the revenues of tho
government or any part thereof. In the
reserve banks. and to make disburse-
ments by checks drawn against such
deposits.
GIVEN MORE POWER
IN DISTRIBUTING FUNDS
Under the present system. the Sec.
retary of the Treasury cannot with
prudence scatter the general fund of
of widely separated national banks
throughout the country Up to the
present time have gone as far in that
direction as ] have felt that 1t was wise
to go, but with the larger powers con-
ferred by the Federal reserve act and
the use which ! may be able to make
of the Federal reserve banks as fiscal
agents Of the government. II will be
prudent and wise to deposit a large
amount Of the general fund of the
Treasury in the Federal reserve banks,
"As soon, therefore. as. the reserve
banks are In operation, / shall trans
fer to them as large an amount of
government funds as possible: this
will, in turn, enable them to extend en-
larged credits. to national banks and
State banks which may become NOM
bers of the Federal reserve system.
which they. In turn, may extend to
their customers, BY this means, and
through the AGENCY Of the Federal re-
serve banks I hope to give additional
assistance to that already given by the
Trensury Department to the cotton
producers. the cotton industry and tho
business men of the South.
The new reserve requirements, which
will become operative on the 10th
day of November upon the opening
OF: tho Federal. reserve banks will re-
lease more than $500, 100000 OF reserve