Arizona republican., 1914-11-19
The Federal Reserve Banks

That the opening of the federal banks Will have a strong tendency to improve money and market conditions is the general opinion. The an- nouncement of the federal board regarding the immediate operations of the banks outlines a most conservative policy one that is particularly reassurng to that class of 'old-line" bankers who may have felt that the reserve banks would have disturbing influence The policy outlined is to con- the available and influences of the banks in the service of the needs of bona-fide commerce assist in the financing of business that already exists rather than extend the accommodations the banks to investment speculative enterprises, however attractive
 In fact, the board indicates a belief that Europe's need of capital will be so much urgent than that, for protection the discount rate will have to be placed at high figure It is apparent that in the opinion of the board this condition will be felt once and >that it may tnue for several years. This will surely tend to strict in degree the speculative movement that no doubt may wish to express itself here as result the rush of prosperity that is already in evidence The board expresses desire for the utmost caution and conservation because of the great commercial expansion it foresees for this country
 The first task of the federal banks is the issu- ance of currency to the banks which furnish the
 
 a much wider range than the government has ever issued currency on before. The administration feels that this should practically do away with the scarcity in currency such as the country has labored under for many months past.
 Under the law national banks required to hold only IS per cent of their deposits in serve, instead of p per hitherto. This leases nearly half a billion dollars; but should imm diate made this permission, for it is the interest of the public at large as well that of the banks, that the new currency law be first thoroughly tested in other respects. In any case banks likely figure that they the best judges of the extent which their reserves be reduced George M. Reynolds president of the Commercial and Con tinental National Bank ,of Chicago, and member of the board of the Chicago federal reserve bank says that this country has just emerged spenddly from financial storm worse than that of 1907. Too much credit for this cannot be given those foresghted banks which had accumulated abundant
 In order that the federal reserve banks might from the outset become the main depositary of the gold reserves of the country, it urged by the government that all member banks make their trans fers of reserves in gold gold certificates far practicable That this request needed may be noted from yesterdays Associated Press dispatch which stated that of the $l7OOOOOOO shifted Mon day from the member banks the regional banks that total of s137 100000 in gold or in gold certificates. Several million dollars worth of commercial paper has already been re-dscounted, and the end of this week should bring most couraging statements of the operations of the banks This will certainly hasten the retirement of the emergency currency issued in August and upon which the banks paying high interest rates.