The Richmond Virginian. (Richmond, Va.) 1910-1920, 1915-11-21
CONFIDENCE CAME WITH
FEDERAL RESERVE ACT
Enect of It's Opera
ton.
FOREIGN TRADE is BENEFITED
Lowering and StabiLzing Of Interest
Rates Throughout the Country a Re-
suit-Possible Danger of Initiation
Also Minimizesi.

William Ingle, Federal agent Of the
Fifth District Regional Bank at
Richmond. in an article in yesterday
Baltimore Sun, says:
The three months period irnme-
diately preceding the opening for
business OF the Federal Reserve Banks
ON November 16, 1914, were morths
OF anxiety. and 1t Is fortunate that
Acknowledgements emerbency
currency law was still alive and. In
Its use, prevented serious climax IN
an unprecedented situation. While the
raw proved Its usefulness in an emer-
gency situation. thoughtful people
fully understood that 1t had its limit
Of effectiveness, and no one could
prophesy when the limit having been
reached. the country might witness
the worst panic in it's experience
Although more than s300,0o0,0o6 Of
emergency currency was issued, no
apprecfahle effect was noted In cur
rent interest rates. which were main
tanned at maximum figures. where 1t
was possible upon any consideration
to obtain needed credit. Export move
neut was seriously checked with
the result that the price Of many
staple comm ODDITIES rapidly aeclin ed.
The Federal Reserve Act had been
on the statute books. unused for nine
months and while many people felt
that II the law could be made actively
useful the result would be most bene-
iciitf, they felt that IL might add to
the embarrassment OF situation al
ready much involved should AT at
tempt he made TO call the new law
into ection. As all will now agree.
1t was fortunate that those charged
with the responsibility of reaching
conclusion In the premises deter
mined that the banks should open
for business on November &c
Confidence Immediately Inspired.
The effect was immediate In In
spring confidence. and where there
fore It had been impossible to OBJ.
tain credit with reasonable facility
1t was now possible to borrow money.
although for n while longer accom- :
mediation was granted only at fun
rates. With the approach OF the data
indicated. the feeling of comfort was
more pronounced. until With the
actual opening OF the banks a1i be-
fore they had loaned single dollar.
money could be readily obtained AZ
per cent, followed. after a further
delay of ten days, by par cent
rate. Az practically not a dollar had
yet been loaned by the reserve banks,
and as there WAS at present no other
cause for change Of sent'a:sn., 1t
would seem &c be apparent shA- ne
one Of comfort and ease was the APP
peciation by the business and bank
ing public OF the fact that. once in
operation. the provisions OF the re-
serve act could be relied upon for
safety.
InfSatton the Future Danger.
The ebb and flow OF credit having
u%m Oh IT, y~rtf
States, the way was made much easier
to those engaged in readjusting for
eign trade, which, in It's later develop
ment. has resulted In making us a
creditor nation. Indeed. SO great has
been the increase in the amount Of
6 old sent us and Of accounts due us.
for ultimate payment In gold Of its
equivalent. that the most serious
possible danger OF the future is such
of money and credit as
may induce. without proper guidance,
most serious imitation. AS the Re-
serve Board has been able TO protect
the country in one extreme OF
situation. it will have the
same power. in q very large measure.
to minimize. IL not entirely prevent.
risk at the other extreme.
The reserve banks primarily are not
operated for profit but for service to
their member institutions and.
them. TO the country. and
no greater service can be rendered
than In insuring stability, certainty
and preservation from the evil effects
Of either serious contraction or over
expansion.
To Hold Interest Rates Down.
The law contemplates guaranteeing
credit to all alike when all alike can