The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-09-15
DOMINATE MONEY MARKET.
FEDERAL RESERVE BOARD
TAKES LONG STEP.
Issues Revised Regulations to Permit
Renewal of Bankers Acceptance
United States Banks to Finance In
tcrnatiOnai Trade.

Cnltcd States Banks to Finance In
tcrnatiOnai Trade.
Washington, Sept. 10.-The time
has come, in the opinion of the fed
eral reserve board, when the Ameri-
can dollar should take a dominating
place in the financial markets of the
world, and when American or dollar
exchange should become the medium
through which the millions of exports
and IMPORTS of the United States are
paid. fpen the field for American
excha 9 He board today issued re-.
vised . Aations governing the redis-
coun g bankers acceptances by fed
eral :: rye banks. providing among
9th : ings that under certain condi-
ito fch acceptances may be re-
ne In explanation of the new reg
| u IS, the board tonight issued a
Is = tent which said:
has been the aim of the board
everything in it's power to create
the American acceptance, that is
dollar exchange, a dominating position
in the world market. Present condi-
uons offer in this respect a great OPP
portunity. In widening somewhat the
facilities Of federal reserve banks in
dealing with American bankers ac-
ceptances the board is attempting to
give the members banks a larger op-
portunity for developing their sphere
of usefulness in this respect.
1.-The United States should now do
what Europe has done for many gen.
erations for the United States, that is
to say. the bank facilities of the Unit
ed States should be used for the car
rying of import and export transac-
tions for foreign countries just as
much as Europe up to now carried by
its acceptances the import and export
| transactions of the United States. In
order to do this with the exchange
1 IL
that it would facilitate foreign trans
fers If liberal conditions should be al
lowed for the renewal of such drafts
SO as TO enabfe these porefgs~esuu-
| tries to have ample time to procure
the necessary cover against the ac-
ceptances drawn by them"
! Members of the board said there
is no connection between revision Of
the acceptance regulations and the
visit of the Anglo French commission
to the United States to take up ex-
change problems with American
bankers
1t was pointed out today, however,
that the new acceptance regulations
might facilitate the credit loan
sought by the Anglo French commits
sion. The board has liberalized con-
ditions so that foreign and American
bankers may use a part of the re-
sources of the federal reserve system
in taking care of purchases made
here for expectation.
On the last day the condition of the
II reserve banks was published, they
had combined resources in gold in
their vaults of about $2O9, 600, 900. If
American bankers decided to extend
credit by indorsing or accepting
drafts oh Europe they probably could
rely on rediscounting these drafts
with federal reserve banks to the
value of many millions.
No regulation has been made by
the board fixing a maximum sum or
percentage up to which reserve banks
may 'invest in this kind of paper.
and. the only declaration of policy in
this respect has been that the banks
could consider not only local de-
mands, but also requirements in 9TH
er districts and that they should
watch carefully the aggregate
amount of acceptance held from
time to time
If American bankers decide to ex-
tend credit in this way the $2O9,OOO,-
200 resources of the reserve banks
could be more than doubled in work.
ing value if the banks or firms which
rediscount the acceptances elected to
take federal reserve notes instead of
book credits. The reserve act re-
QulreS ONLY a 40 nor cant ,.old ro
serve against federal reserve notes is
sued SO that in reality federal re-
serve notes amounting to more than
$500, 100000 could be issued against
existing federal reserve bank gold re-
sources of more than $4,000, 1000.
nRIZE IIEIIT unNI1rIIrr q