The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-10-14

reserve system. the wish must be re-
gardcd as based on enthusiasm rather
than on knowledge.
CLEARING FUNCTION
WILL PROVIDE MOTIVE
1T is probable that State bankers
who have, what to them. seems II
good reason for postponcment of ac-
ton. VIII continue to find such rea-
sons for some time TO come and will
not bestir themsel, es to join tho sys-
TEN until very Instinct. fresh motive
, is afforded them for so doing. What
Will that motive be? 1t seems to mo
that the motive is hardly likely to be
found In the mere lack of opportuni-
ties for rediscount If the rediscount
plan operates as it Is expected to,
state banks will get tho benefit Of it
indirectly, by finding themselves able
to dispose of their paper OH favorable
terms in the open market without
necessarily going to n Federal reserve
bank for their accommodation. 1t Is
rather to be expected that tile motive
tending to lead state bankers to en-
ter the system, will be found in the
claring function.
III tho clearance provision in tho
, Federal reserve act proves successful,
it may be expected that business will
lie transferred to the member banks
inense advantage open TO them as Il
result OF the provisions freeing them
from the oppressive conditions TO
which they have been subjected in re-
gard to domestic exchange. 1t will
he imperative for State banks to place
! themselves upon as good n foundation
for appealing to the public in this re-
gard as that upon which the member
banks rest. We may say, therefore,
that the carly entry of State banks
into the system depends in n very
large measure on the way in which
the ClplrDucn ic handled nd
the extent to which tho clearing func-
ton is taken over by the Federal re
| serve banks under instructions from
the Federal reserve board. Provided
that this work is undertaken cour-
! ageously and successfully, tho result
| will be TO enlarge very greatly the
| membership of the Federal fre4erve
| system.
! GOES BEYOND BOUNDS OF
IMMEDIATE PROFIT
Uniformity of management, sim
rlicityi in domestic exchange, ability
to bring aid to those institutions or
sections where aid is needed and to
| afford opportunities for fluid and legi-
| innate Investment to those parts Of
| tic country which have Superabund-
ant funds, will be promoted by the
extension of the membership of the
| Federal reserve system. When all has
| heen taken into account, ] believe
/ that the thoughtful and non-partisan
! banker will conclude that the qucs-
! ton of membership is one that goes
| beyond the bounds. of Immediate bust
| ness profit In tho course of my re-
! marks, l have endeavored to consider
| tie problem with some little detail
| from the business standpoint. But
| banking on its higher side is, in my
/! view of the case, profession. 1t has
/ its professional standards and it's pro-
fcssionai requirements. 1t performs
| an important public function.
/ The banker must, therefore. con-
| slider not only what dividends he can
make for his stockholders and what
losses he can prevent them from in
| curing, but he must also think of the
fulhllment of this public function in
the best way. In the United States we
have long suffered from incomplete
bility and divergence Of banking
methods. An opportunity is now given
| for standardization and for improve
ment of practice. Should not the State
thanks of the country, who have so long
tborne an honorable and distinct part
! i'll the promotion of the country's COM
mercial welfare. and many of whom
have charters running back for a long
period prior to the formation of the
national banking system, stand ready
Ia join in the effort to further the sue
cess and insure the greater soundness
of banking methods in the United
States.
They can, If they will, attain these
objects by ahliatlng themselves with
I the new system, and by helping.
| through their influence and example,
to make ii Il success. II is, | think,
to be hoped that they may look at the
question from some such standpoint
as this, and i'll consequence, give their
direct aid and support to the Federal
reserve system, as we'll rs draw aid
and support from it-becoming MEM
bers OF lit, and undertaking to give
the fullest possible effect to the bene-
| fetal ideas embodied in the act OF
1913"
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