The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1914-10-14
FAILS At MITIGATION OF
ENTIRE BANKING SYSTEM
National Bankers Submerging Opin-
i~T
ions Are Coming to Support Of the
scheme-Faces Contradictory situa-
tion-Bankers' Motto Must BE "Safe-
ty First"-Interest Rates Will Still
be Governed by Supply and Demand.
(By Associated PreSS.)

Richmond, Va, Oct. 1.-THE for
tieth annual convention of the Ameri-
can Bankers Association which met
here today brought the American
bankers together in large numbers for
the first time since the. Federal Re-
serve Act was passed by Congress.
Arthur Reynolds of Des Moines,
president of the Association, devoted
the greater part of his opening address
to the Federal Reserve scheme. He
gave assurances that the country
might rely upon the bankers to do
their part toward making the system
a success, Notwithstanding their
opposition to it in just the form adopt
ed. He noted some of its fine points
and its weaknesses, and advised bank
ers how to adjust themselves to the
charge.
only-Limited Number Scheduled.
National bankers had submerged
their opinions, he said, and were cor
daily coming to the support of the
Federal Reserve Banks, as required
by the. act, and a, limited number Of
banks and trust companies organized
under state laws had come into the
system, '".but not to the extent neces-
sary to, warrant the anticipation of
that complete unification of our entire
banking system so long desired"
The rule Of the banker must be
safety first" he said, in considering
the difficulties the Federal Reserve
Banks would have In keeping impound.
ed all the means necessary to relieve
sudden distress, and at the same time
to rediscount freely enough to avert
contraction of credit 1T will require
rare wisdom, indeed" he said, 'to
meet so contradictory a situation"
Others More Productive.
If there were any assurance that
the Federal Reserve Banks would hold
large deposits aside from those fixed
by provisions of the act, he thought
there might be a workable margin,
but he saw no inducement for member
banks to keep active accounts with
the Federal Reserve Banks beyond the
amount of the required reserve.
Their commercial relations with the
other banks of the country will always
be more productive and at the same
time conform with the natural trend
of business" he said.
Supply And Demand Given.
| He continued
with the practicability of the plan
admitted the question that naturally
propounds itself to those engaged In
banking is, how will its operation af
feet the profits of their business
Reasoning from the fact that the Fed
eral Reserve Banks will not enter into
competition for the commercial bust
ness of the country and for the reason
| tudI tuCy VIII DO cbii5Ou " quotO
rate of discount at least as high,
not higher, than commercial rates IL
order to maintain the resources neces
sary to enable them to extend help II
need, believe the conclusion is wal
ranted that in the future, as In tn
J past, rates of interest will be gov
erned by the law of supply and dt
mand.
J Cannot Increase Supply.
J "The Federal Reserve Banks hay
} no way of increasing the supply {
} actual money in existence; if the
} had, they might reduce rates. The
) most efficient help in that connectit
} (Cpntinued on Page Four.)
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