Newark evening star and Newark advertiser., 1914-10-26
RESERVE BANKS
TO OPEN NOV. 16
Mints to Release More Than
$500, 900, ,ooo-Expect South
to Be Relieved.

WASHINGTON, oct. s6.-steps to
set in motion the machinery of the
twelve Federal reserve banks under
the new banking system, the opening
for business of which has been fixed
officially by Secretary McAdoo for
November 16, We're being taken here
today by the Federal Reserve Board.
Confidence was expressed that the
early opening of the reserve banks
would go a long way toward relieV-
ing conditions in the South. brought
on by the European war. and be Of
assistance in the general business
situation throughout the country.
Emergency conditions in the South.
IN particular, prompted the secretary
10 designate an early date for the
opening of the reserve banks.
With the twelve banks thrown open,
more than 100000, 900. the secretary
says. win be released from the mints
nnd made available 10 the countrys
bankers.
This coming ON top OF the consum-
nation of the scheme, worked out
here during the last week, for the
SlS5,00o,000 cotton pool will put in
call more than half billion dollars
now tied up in government or pri-
yate vaults.
The opening of the reserve banks,
The Secretary of the Treasury points
out, ought TO aid the move to relieve
the tightened cotton situation in the
South. In its larger aspect, it is cal
culatcd here. ii will go a long way
toward the plan of government back
ing in International exchange for
which Sir George Paisch. the English
representative of the exchequer, and
the American bankers have been
been working.
South Impelled Haste.
In his statement Mr.. McAdoo says
j am impelled to this decision par
ticularly because of the urgent con-
ditions in the South and the confl-
dent belief that the prompt opening
Of the reserve banks will be very help
ful to the cotton situation and to gem.
eral business in all sections of the
country.
This conclusion has been reached
after a thorough discussion with my
assistants on the Federal Reserve
lloard, who are cooperating cordially
With me, and also after full consid-
ration of the views expressed by
ne directors of the Federal Reserve
aanks at their recent conference in
Washington.
Il am fully aware of the physical
ificulties that must be overcome to
t the reserve banks in motion on the
'th of November, but the directors
these banks represent the highest
gree of American banking ability,
I'd am sure that not only can they
eet the situation but that they will
eerfully take up the task in the
M kfrft e IL H..
itch animated their discussions at
Washington conference.
As the result of the enactment of
war revenue measure the parity
tween receipts and disbursements
the treasury will soon be happily
stored. This will make it possible
I the treasury to render still greater
vice than it has already rendered
helping the financial situation in
South, and in other parts of the
untry where the need has appeared.
ie prompt opening of the Federal
eserye banks will make the assist
zee of the treasury double powerful
cause the Federal Reserve act au-
1orizes the secretary of the treasury
"A his discretion to deposit a large
mount of money held in the general
md in the Federel Reserve banks,
nd to require such banks to act as
seal agents of the United States and
lso, in his discretion, to deposit the
venues of the government or any
art thereof, in the reserve banks,
nd to make disbursements by checks
rawn against such deposits
TO TraIssfer Government Funds.
Under the present system the sec
aetary of the treasury cannot with
rudence scatter the general fund
of the treasury among the great
number of widely separated national
hanks throughout the country. Up
o the present time l have gone as
ar in that direction as | have felt
& was wise to go, but with the
arger powers conferred by the Fed
raj reserve act, and the use which
may be able to make of the Fed
raj reserve banks as fiscal agents
t the government, it will be prudent
end wise to deposit large amount
If the general fund of the treasury
IN the Federal reserve banks.
AS soon, therefore, as the banks
are in operation | shall transfer to
hem as large amount of govern
nent funds as possible; this will, in
urn. enable them to extend en-
arged credits to national banks and
State banks which may become
members of the Federal reserve sys-
en-, which they, in turn, may ex-
tend to their customers. By this
means and through the agency of
he Federal reserve banks l hope to
i've additional assistance to that al
lady given by the Treasury Depart
ment to the cotton producers, the
otton industry and the business
aen of the South.
THE new reserve requirements
hich viii become operative on Mo-
ember 16. upon the opening of the
ederal reserve banks. will release
lore than s400.000000 of reserve
ioney and largely increase the
redit facilities of the banks of the
3untry"
Sir George Paisch will resume his
conferences with the American
lankers late in the week.