The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1914-10-31
FEDERAL RESERVE BANKS.
Secretary McAdoo Sets Opening Date
Forward to Nov. 16-Action
Expected to Benefit Business
Greatly, Especially In South.

Forward to Nov. 16-Acto,
| Expected to Benefit Business
Greatly, Especially In South.
An Associated Press despatch from
washington, dated Oct. 25, says tn,
twelve federal reserve banks of tn,
new banking system will be opened
for business Nov. 16
Secretary McAdoo, authorized b,
the currency act to name the opening
date, made the announcement. Hi
choice of the 1Sthawas made despite
the recent recommendation of tn,
directors and governors of the twelve
banks against opening before Nov. 80
Mr.. McAdoo declared he had reach
ed his decision after discussion will
the Federal Reserve Board and be
cause of emergency conditions in tn,
south. He believes the opening O.
the banks, especially helpful there
VIII benefit business in all sections.
in a statement the secretary made
It clear that under the new systen
the federal government will be able
Dy deposits from the general fund OF
tie treasury in reserve banks, tt
aid producers Of staples. The new
reserve requirements, he pointed out
will release more than $400, 100000 O:
money now held by national banks a:
reserves and will add greatly to the
loan1ng power OF the banks.
The statement, in part follows:
Il have determined to announce or
No hc
establishment of the federal reserve
banks in all the federal reserve dis
tricts. On that date the new reserve
requirements for national banks, as
prescribed by the act, will become
operative.
II am impelled to this decision
particularly because of the emergenc.
conditions in the south and the con
fldent belief that the prompt opening
of the reserve banks will be very
helpful to the cotton situation and tc
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 consider
alton Of the views expressed by the
directors Of the federal reserve banks
at their recent conference in Wash.
1ngton with the Federal Reserve
Board.
Il am fully aware of the physical
d1fftcultfes that must be overcome to
set the reserve banks In motion on
the 18th OF November, but the direc-
tors of these banks represent the
highest degree Of American banking
ability, and ! am sure that not only
can they meet the situation, but that
they viii eheerfully take up the task
fIIstfle same ser
vice which animated their discussions
at the Washington conference
AS a result of the enactment of
the war revenue measure, the parity
between receipts and disbursements
OF the treasury will soon be happily
restored. This will make 1t possible
for the treasury to render still great
er service than it has already rem
dered In helping the financial situa-
t1on in the south and in other parts
of the country where the need has
appeared. The prompt opening of the
federal reserve banks will make the
assistance of the treasury doubly
powerful because the federal reserve
act authorizes the secretary OF the
treasury, in his discretion, to de-
post large amount of the moneys
held in the general fund in the fed
eral 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,
in the reserve banks and to make
by checks drawn
against such deposits.
Under the present system the sec
retary Of the treasury cannot with
prudence scatter the general fund
Of the treasury among the great
of widely separated national
banks throughout the country. Up
to the present time / have gone as
far in that direction as l have felt
1t was wise to go, but with the
larger powers conferred by the fed
eral reserve act and the use which
I may be able to make of the fed
eral reserve banks as fiscal agents
Of the government, it will be pru-
dent and wise to deposit a large
amount Of the general fund of the
treasury In the federal reserve banks
'tAs soon, therefore, as the reserve
banks are in operation, I shall trans
fer to them asSErge an amount Of
government funds as possible; this
will, in turn, enable them to extend
enlarged credits to national banks
and state banks which may become
members of the federal reserve sys-
TEN, which they, in turn, may ex-
tend to their customers. By this
means and through the agency of the
federal reserve ba1jffs, I hope to give
additional assistance to that already
given by the treasury department to
the cotton producers, the cotton in
dustry, and the business men Of the
south
ssThe new reserve requirements,
which will become operative on the
10Th day Of November, will release
more than s400,O 100000 Of reserve
and largely increase the
credit facilities of the banks of the
Cattle Industry Growing.
The cattle industry OF Louisiana Is
growing every day. In East Baton