Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-10-26
M'ADOO DESTGNATES
NOV.1OASDAY IL NEW
RESERVE BANKS OPEN
More Than $400,000,0 900
Will Be Released by In
ception of Jew l. aw.
Cotton Situation to Benefit.

WASHINGTON, Oct 2e.-official an
nouncement Is made by Secretary Of the
Treasury McAdoo that the IL Federal re-
serve banks will open for business on
November 16. The Secretary points out
in his statement that when the banks
are opened moro than A0O, 100000 of re-
serve money, now held in the vaults of
banks, will be released, as under the
new banking law 1s per cent. reserves
will be required, as against % per cent.
now exacted.
Secretary McAdoo says that he was
impeled to set November 16 as the open
ing date for the banks because OF the
cotton situation in the South and the
general business conditions throughout
the country. He points out that the
opening of the banks should relieve the
cotton situation.
In his statement Secretary McAdoo
SAYS:
IT am fully aware of the physical diff
ficulties that must be overcome to set
the reserve banks in motion on the 18th
of November, but the directors Of these
DdUhB TepISbtnL lH6 IllBHbSl ubeItt VI
American banking ability. and am sure
that not only can they meet the situation,
but 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 parity between
receipts and disbursements of the Treas
ury will soon be happily restored. This
will make 1t possible for the Treasury to
render still greater service than 1t has
already rendered In helping the financial
situation In the South and in other parts
of the country where the need has ap-
peared.
MORE AID FROM TREASURY
THE prompt opening of the Federal
Reserve banks will make the assistance
of the Treasury doubly powerful. be-
cause the Federal Reserve act author
ICES the Secretary of the Treasury, in
his discretion, to deposit large amount
of the moneys held In the general
fund in the Federal Reserve banks and
to require such banks to act as fiscal
agents of the United States. and also
in his discretion to deposit the revenues
of the Government, or any part thereof,
bursements by checks drawn against
such deposits
Under the present system the Secre-
tary OF the Treasury cannot with pru-
dence scatter the general fund of
the Treasury among the great num-
Der of widely separated national banks
throughout the country. Up to the pres
ent time l have gone SO far in that
direction as I have felt 1t was wise to
60 but with the larger powers con-
ferred by the Federal Reserve act and
the use which l may be able to make
OF the Federal Reserve banks as fiscal
agents of the Government, il will be
prudent and wise to deposit a large
amount of the general fund in the
treasury of the Federal banks"
WILL DEPOSIT FEDERAL FUNDS.
'As soon, therefore, as the Federal
banks are open 1 will transfer to them
as large an amount of Government funds
as possible. This In turn will enable them
to extend large credits to national banks
and State banks which may become
members OF the Federal reserve system,
which they in turn may extend to their
customers.
by this means, and through the agency
of the Federal reserve banks, I hope to
give additional assistance to that already
given by the Treasury Department to the
cotton producers, the cotton Industry and
the business men of the South.
THE new reserve requirements, which
will become operative on the 18th day OF
November upon the opening of the Fed
eral reserve banks, will release more than
s400, 100000 OF reserve money and largely
increase the credit facilities of the banks
of the country"