The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1914-01-24
TRADE CONDITIONS
IN new ENGLAND.

January 10. and gives a comprehens-
i've idea of trade conditions in the
New England states:
The slightly better tone impaired to
trade by holiday buying has faded
away and mercantile business has be-
come noticeably quiet, due to trade
depression intensified by unseason-
ably open weather and inventory TAX
ing. Idle freight ears are on the in
crease, and reports from nearly all
sections record surprising number
of unemployed workmen. The great
number of failures and the amount of
total liability indicate clearly the
strain under which business has been
conducted during the last year or two.
General Conditions.
In New England the uncertainties
and readjustments attendant upon the
passage of the tariff and currency
bills have done much to hold in
check any constructive trade activity.
In textile circles complaints are heard
of the unscientific basis of the cotton
schedule in the tariff act and there is
very little as respects the New Eng
land railroad situation to encourage
either investors or business men. AL
though the New England situation, in
spite of some slight betterment of
sentiment contains but little actual
sunshine for the months Immediately
ahead. 1t is hoped however, that the
business sentiment, distinctly notice
able, coupled with lower money rates
may be the forerunner of actual i'm
provement in trade conditions later in
the year.
The Federal Reserve Act.
Prominent among business phases
of the year 1914 will be a process of
readjustment of the country's bank
ing system to the new currency law.
This bank believes that the law is on
the whole distincet step in advance,
and accordingly will enter the FEEDER
al Reserve system, doing so in no
reluctant nor critical spirit but with
desire to cooperate to the fullest
extent toward making the new plan
effective and useful. AS it was in
evitable in view of widely varying
opinions and resultant necessity for
compromise, the law shows certain in
adequacies, technical imperfections,
and perhaps, even, possibilities of
tains much that is sound, and the de
ttttS Will DC idikc1y OnStt, we Dt-
lieve, by careful administration.
The chief advantage of the new
legislation. as we view twill be found
in the provision for greater mobility
of banking funds. The bill falls short
of the ideal in this respect, for while
considerable degree of mobility is
promised over the several areas to be
represented by reserve banks, there
H., Il.
funds from one region to another
which would be provided by large
central institution with regional
branches. For this omission, however,
there is offered partial remedy in
the power of the Federal Reserve
board as to transferring of regional
funds by re-discount between the re-
serve banks-a power which should
be necessary to the permissive extent
only.
The law has further possibility of
Importance, with respect to the plac-
ing of the surplus funds of the gov
ernment at the disposal of business.
In this matter, however, much will de-
pend upon the attitude of Washing
ton, since the provision in the com
pleted bill concerning deposit of treas
TRY funds with the reserve banks is
permissive only, instead of mandatory
as in the original form.
A further provision in the bill auth
orizes the issue at the discretion of
the Federal Reserve board of a new
form of currency to be known as Fed
eral Reserve notes, secured by COM
mercial paper Such currency, how
ever, clearly is not intended as
necessarily displacing the present
hond-seeured circulation of the ma
tional banks. The law provides that
the bonds securing this circulation
may be transferred at par and accrued
interest to the regional banks, up to
a given amount annually, and the re-
gi0nal banks are authorized to con-
tinue circulation against them. They
are permitted, however, subject to the
approval of the Reserve board, to ex-
change such bonds for three per cent
bonds or notes of the government not
carrying the circulation privilege.
Hence the policy as to the issue of
Federal Reserve notes should be con-
tingent in part upon the course of the
member banks as to continuing or re-
tiring their circulation, and further
upon the policy of the Reserve banks
and the controlling board as to re-
placing such notes as he member
banks may retire.
To such extent as the bond d.secured
circulation continues to be utilized by
the member or reginonal banks we
should anticipate an especially con-
servative policy as to the issuing of
Federal Reserve notes. With the final
retirement of the bond-secured notes
the problem would assume another
phase The Federal Reserve board
would be influenced doubtless by the
fact that the country has grown ac-
eustomed TO tn ecirculation of a con-
siderable volume of such currency,
and at the same time would use care
to see that its policy in issuing the
new notes should not promote loan
expansion in excess of that which
this absorptive capacity has seemed
to Justify. Meanwhile, however, much