The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1914-11-21

Washington, Nov. 1G.-Although the
y federal reserve banks began bust
ness only today the federal reserve
beard already has before it plans fer
"i"ening their field of operations and
increasing their store Of cash. No def
nlie data on the business done was
aNallable tonight but Secretary Willis
teieSraphed each bank Tor an account
or its rediscOunt business and expect
ed to lay a report before the board
tomorrow.
Inc board may not be willing to
draw definite plans from one days
business, but the first week may have
material effect and may result in
augmenting the cash Of the banks by
more than S15O,OOO,OOO. The board
has under consideration the deposit
OF large part of the loose cash now
deposited in national banks.
II the first weeks rediscount busi-
ness shows that the reserve banks can
use more cash, the board probably will
Guggest the adoption Of this plan. It
has been reported to the BOARD that
there is about s11O,OOO,OOO in the
treasury available for this purpose
and that about $G4,OOO,OOO Of the
$'9'ooO,OOO now in banks on deposit
for the government could he trans
ferred.
The board tonight made public a
circular defining time deposits as in
Guiding any deposit subject to check
on which the bank has the right by
written contract with the depositor at
the time of deposit to require no:
less than so days notice before any
part of it may be withdrawn Any
agreement with q depositOr not to en-
force the terms of such contract
snail Vitiate the contract. The de-
partment has notified postmasters that
no postal savings funds shall be de-
posted in banks not members of the
federal reserve system, and instruct
ing them to discontinue deposits in
such nOn-member banks.
The regional banks which will serve
as centres to provide for the CONNER
cial requirements of the country have
been established in New York, Boston,
Philadelphia. Cleveland, Chicago, Min
neapolis, st. Louis, Kansas City, At
lanta. Richmond Dallas and San
Francisco. Their operations for the
next few months will consist largely
of the rediscounting of notes, drafts
and bills of exchange. Later their
field will be extended to permit them
to exercise remaining functions de-
fined by the currency law.
In the new system are 1911 men,
Der banks with an authorized capital
placed at $1O6.795,6Oo. One-sixth OF
that amount has been called in and
placed in their vaults. Cash reserves
in the II regional banks is estimated
at nearly $25O,OOO,OOO. drawn under
the currency law from present re-
serve agents Of the member banks.
Members of the federal reserve
board felt today that they had estab-
lished the system just when cOndi-
,ions presented excellent opportunity
to test its reserve.
Ability Of the federal banks to dis
dount commercial paper has been
looked to as Il means Of providing
financial machinery for the movement
of crops and meeting general business
needs.
Asserting that the opening of the
banks marked a new era in the his
tory of business and finance in the
United States, Secretary McAdoo
added:
1T is believed that they will put an
end to the annual anxiety from which
the country has suffered for the past
generation in sufficient money and
credit to move the crops each year
and will give such stability to the
business that the extreme fluctuations
in interest rates and available credits
which have characterized banking in
the past will be destroyed porma-
nently."
Paul NJ. WarburS of the federal re-
serve board today declared that No.
vcmbcr 16 might be considered in the
economic life of the United States as
the foundation Of The nations
financial emancipation.
The new banking system wisely
said Mr.. WarhurG,
will prove to he the means. not of in
ilation, but of safety, indcp, ndcncr
and gradual, healthy expansion. How
soon We may become 4 ", Id power
equal in strength and ind pcnd"ncr 10
those on whom we have had To lean
until now. will depend upon our ahil-
ity to avail ourselves OF the oppor-