New-York tribune., 1914-11-16
RESERVE BANK
STARTS TODAY
Will Have More than S1l0,-
100000 with Which to
Do Business.
BIG REDISCOUNT
BUSINESS PLANNED
National City's Vice-President
Shows Where New Act Bene-
fits Whole Country.

The Federal Reserve Bank of New
York, as the chief member of the
twelve regional banks comprising the
reserve system, goes into operation at
10 o'clock to-day, eighteen months
since Congress first set itself 70 re-
model the banking and currency laws
of this country and nearly eleven
months since President Wilson put the
Federal Reserve act on the statute
books, on December %, 1913.
Despite the criticism aimed at New
York bankers from Washington from
time TO time during the framing of the
act, 10 has since been recognized that
the advice Of those who have often
been called members of the so-called
money trust was of paramount i'm
portance in creating those features of
the law which, il is believed, will prove
of the greatest benefit to the banking
and business interests Of the United
States.
The main features of the act were
summed up yesterday by Vice-Presi-
dent Arthur kavanagh of the National
City Bank. From the first the officials
Of this institution were fearless in Civ
ing their opinions on the many sug-
gestions of members of Congress dur
ing the period of the formation of the
act, and all agree now that criticism of
the character then offered was of ul-
innate benefit.
"The Federal Reserve act" said Mr..
Kavanagh, Should be a boon to the
banking business interests Of the
United States for three reasons. 1t will
provide for the quick mobilization Of
reserves in times of financial stress, it
will enable the banks to make loans
more freely to proper borrowers and
will create an open discount market
"When these provisions of the law
are operative for the first time in the
history Of the country credit may be
extended in its proper volume and
safety"
The Federal Reserve Bank of New
York will ultimately possess total
capitalization of S20,62l SOC, represent
ing per cent of the capital and sur
plus Of the member banks. The banks
of this district have already paid in
their first subscription of | per cent.
The amount of reserves that will be
transferred 10 the central institution
beginning to-day will be in excess OF
SlO0,0 100000, which will permit OF n
big rediscount business being done
from the start, due 10 the intention OF
many of the large member banks to de-
post optional reserves as well.
With a staff of about fifty clerks,
borrowed largely from the New York
member banks, the work Of the local
Reserve Bank will be largely taken up
to-day with the counting of the re-
serves that will come in from New
York and Brooklyn. These transfers,
according 10 Governor Strong, Will
amount 10 S91 100000 Of which over
S87 1000. 900 will be in the form of gold
or gold certificates in large denomina-
tions, probably of $1,000 each. The
total of excess deposits over the min
imum requirements will be in excess
of S7,000,000, which, with the amount
of capital already paid in, will give the
bank more than Sl10,000,000 with which
to do business this week.
The deposit of so large an amount Of
their reserves in gold by the banks
was in pursuance of the recommenda-
tions of the Controller of the Cur
rency that they be made in this man
ner. The law requires that only half
the reserves be made in gold or lawful
money, and permits the other 80 per
cent to be made in commercial paper.
The directors Of the New York Fed
eral Reserve Bank are as follows:
Glass C-Pierre Jay. chairman and
Federal Reserve agent; Charles Starek,
deputy chairman, and George +. Pea
body. Glass A-William Woodward,
Robert II. fireman and Franklin d..
Locke. Class B Henry r. Towne,
William B. Thompson and Leslie R.
Palmer.
Benjamin Strong, jr., is governor
and chairman Of the executive COM
mittee.