The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1914-11-19
RESERVE
SYSTEM PUT into
OPERATION TODAY
Secretary McAdoo Signs For
NAL Statement Announcing
New Financial Machinery
Is Ready For Business.
DIRECTORS ARE HOPEFUL
This Is Financial Fourth of July
Says Warburg-Banks Will
Limit Activities Until
Well Established.
DIRECTORS ARE HOPEFUL

Washington. Nov. 17.-The country
today entered on a new era in its
banking and currency affairs, when
Secretary of the Treasury McAdoo Of
fcially announced the establishment of
u federal reserve banks, and the
opening OF the new federal reserve sys-
tenn. Although without Formally. the
Importance Of the opening Of the new
system is fully realized here and
throughout the country.
That it will go far to make credit
conditions easier throughout the Uni
ted States, not merely now but per-
manently, is he expectation. Many
believe that 1t will go far to make the
United States the dominant power of
the world. The immediate effect, as
estimated by Comptroller Williams
will be to release $46o, 600, 900 in GOLD
and legal tender which will form the
basis for a possible loan expansion Of
$1,000, 000, 900.
The secretary sent the following tele.
gram of congratulations to the federal
ceserve agent and governor OF each of
The federal reserve banks:
Please accept my cordial congratula-
tons upon the opening OF the federal
reserve bank of your district and my
sincere commentator on the effective
work you have done in preparing the
bank for business in the short time
allowed for the opening. I am sure
that he federal reserve banks wiz
serve a great and benefcient purpose
in the future of our country and I ana
sure that this department and the fed
eral reserve board may count on your
loyal cooperation in this important
work and duties which have been con
fided to you. My hearty good wishes
for YOU success"
Financial Fourth OF July.
Pau M. Warburg, possibly the most
experienced banker of the federal re-
serve board, today declared hat No
vember IS, might be considered the.
Fourth of July in the economic life Of
the United States, marking the founda-
ton Of the nations financial emancipa-
ton.
THE new banking system, wisely adj
ministerial" said Mr.. Warburg, will
prove to be the means not of initiation
but of safety, independence and gradual
healthy expansion. How soon we may
become a world power, equal in
strength and independence to those Or
whom we have had to lean until now,
Will depend upon our ability to avail
ourselves Of the opportunity now open
to us We are starting out today am
bilious of attaining this end, but we
are still far removed from our goal.
With a spirit prevailing of unselfish
moderation and mutual ~helpfulness
with careful planning and ~singleness OF
purpose, we are certain to overcome the
obstacles that still block our way both
within and without"
First Operations Limited.
The - ank designed to take care Of
the commercial needs of the entire ma
ton are located in the following cities:
Boston, New York, Philadelphia, Rich
mond, Atlanta, Cleveland, Chicago,
Minneapolis, st. Louis, Kansas City,
Dallas and a Francisco.
For the present the operations of
the banks will be limited largely to
the ~rediscounting of notes, drafts and
bills of exchange, but as experience is
their other functions under the cur
rency act will be AIKEN. The directors;
Of all the banks have been selected,
the board has named it's representative
for each, and suitable quarters have
been secured in all the IL cities.
7.571 Member Banks.
Officials here will watch the pro-
sress OF the system with the utmost in
%terest. 1t starts on it's mission WITH
Ae71 member banks. Their authorized
capital is put at $106, 795, 600, Of which
one-s1xth has been called and is in
their vaults. The exact figures for the
cash reserves in all IL banks has not
been accurately computed, but the es-
innate put the amount at close tie
ESQ, 00O,0 600 drawn under the law from
the present reserve agents of member,
banks.
The reserve banks begin operations;
at a time when members Of the board
feel that this is an excellent emporium
tty to test the value Of the system. On
their ability to discount commercial
paper has been counted upon as one OF
the means to loosen the purse strings
Of banks, provide machinery for car
Ing for crops and generally meet busi-
ness needs.