New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-01-02

II was lntendeu tEdJ the new Ddli p
system should encourage the banks TO
begin Immediately the rediscounting Of
bills Of exchange and commercial paper.
This privilege, however, has not been
utilized TO any appreciate degree
owing 10 the low interest rates when
have prevailed since the Reserve banks
began operation, making it Improbable
and Unnecessary for the banks 20 re-
discount their loans at higher rates
than they are getting from their bor-
roWers.
The discount operations Of the twelve
regional banks for the week ended De-
cembcr 26 amounted TO only SS,552,-
600, and of this total the insignificant
sum of s620,l59 belonged to the New
York institution, where 1t is expected
ultimately that the bulk of these OPP
erations will be centred.
Paul NJ. Warburg's Tribute.
Any attempt to predict what the re-
serve system will do for its members
would be futile, based on the operations
TO date. Judgment of its final success
must still be founded on predictions
made by such students of finance as
Paul VI. Warburg, the member of the
Federal Reserve Board from New York.
r. discussing the establishment Of the
new system with its inception on No
vember 1G Mr. Warburg said:
The 10th of November may be con-
sidered as the Fourth of July in the
economic life of the United States.
Coming generations will commemorate
il as marking the foundation Of our
financial emancipation. The new bank
ing system, wisely administered, Will
prove TO be the means not Of inila-
ton, but Of safety, independence and
gradual, healthy expansion. How soon
we may become a world power equal
in strength and in principle to those
on whom we have had TO lean until
now will depend upon our ability 20
avail ourselves Of the opportunities
now open 10 us. We are starting out
to-day ambitious of attaining this end,
but we are still far removed from our
goal.
THE country is 10 be congratulated
upon having produced a group oil
strong and patriotic men who have
come to the front TO man the twelve
boards and upon the splendid cooper
alton shown by the banks. With a
spirit Of unselhsh moderation and NUT
ual helpfulness prevailing, with care
pose, we arc certain TO overcome the
obstacles that still block our way both
within and without
In his announcement that he would
formally declare the establishment OF
the Reserve banks on November 10,
Secretary of the Treasury McAdoo said
that their opening marked a new era
in the history of the business and
finance of this country. He believed
that they would put an end TO the an
nual anXiety from which the country
has suffered for the past generation
about insufficient money and credit 10
move the croDs, and would give such
stability to the banking business that
the extreme fluctuations in interest
rates and available credits which had
characterized banking in the past
would be destroyed.
Chief Benefits OF New System.
The CHIEF features OF the Federal
Reserve system were set forth as fol
lows by II. Parker Willis. secretary Of
the Federal Reserve Board:
"The striking aspects of the legisla-
ton are these three: tl The creation
Of general discount market for com
mercial paper. 90 the systematic pool
ing of reserves Of existing banks and
(31 the provision OF an elastic cur
rency. In the multitude of details pro-
vided by the legislation and In the
various adjustments rendered neces-
sarv by il with respect TO government
deposits, bank reserves, examinations
and other more or less important mat
ters. il is noticeable throughout that
everything done has been for the pur-
nose OF promoting the objects ALREADY
enumerated and OF insuring the trans
formation Of American banking from
it's present basis Of organization TO us
now proposed type of effort.
IF these chief objects snail be &C
complished in actual practice the legls-
lation will have been amply warranted
and. IL need hardly be said, VIII COM
pletely revolutionize the banking ana
credit situation. TO the great proht not
only of the banks themselves bGt o.
their customers. That the business
public will profit in a far hlgher &c
gree than the banks is less OBVIOUS DuS
is fact which constitutes the chlei
Losis for the legislation. In its real
sorsa the new law is in fact and IN the
Ret sense of the term business man
The Kew York Federal Reserve Bans
concluded its first dave operation WIN
totol resources of 02.933,5sO. Ot TINS
GOO 81 $40 represented the reserves
naid m bv 90 of the $50 member oanhs
md s8.82t.91O the amount received m
roSneut of the first subscription 70
~ canitaI OF the S99,6ll'6O re
ser,a nsvments S7s,2l3,74O was paid IN
oold' gold certificates and clearing
House deposit certificates representing
ooId or cold certificates.
According to its statement lssueu
Lost saturday the local Reserve INST is
. .,,;on had total resources Of slO5'4'-'-
SS4 an indication Of its limited oper,
st;ons up 10 the present IN time OF
great monetary ease.
Rediscount Rates Fixed.
The Federal Reserve Board, in prep
ration for the opening OF the banks
under the limitations outlined az the
Stsrt fxed rates Of rediscount' dehned
commercial paper. fixed general re-
6isrount policy and drafted bylaws Tor
tba hanks. The definition OF CONNER
cisl naper eligible for rediseount was
made general and both single ana Two S.o
nan,e naper were accepted. The redis-
corrt rates determined upon at the pc
SHINING were as follows: ,,
New York and Philadelphia, OF per