The Barre daily times. (Barre, Vt.) 1897-1959, 1915-01-27
u. S. RESERVE BANKS
PUT COUNTRY ON FEET
Declared Board in Submitting Annual
Report to Congress--System Has Passed
Beyond the Experimental Stage.

lilt ODtHillE VI hhN X lfRlbtldl lib'i "
banks last November and the two month";
in which they have been in actual opera
tion, was sent to Congress to-day. i
announces that noteworthy results al
ready have been accomplished and that
the system now 'cannot be regarded al
experimental in the sense that there il
any uncertainty as to the outcome.
No legislation is asked for, the board de-
, voting its report chiefly to an outline
of how the new system has strengthened
the nations financial situation.
The board refers briefly to open mar
ket operations Of the reserve banks and
announces that regulations governing
the purchase of acceptances viii soon be
made public. With the issue of these
regulations, the report says, there will
be ample employment for all funds Of
these banks, which experience demon
strates they may safely and properly
invest at times when such funds are not
absorbed in responding TO the demands
Of commerce, industry and agriculture.
The board points out that another
pressing problem, that of admission of
state banks and trust companies to the
system, is receiving consideration and
tHhL 1T 1chSt ~ lkIthtiNt hpluLiDH Vi tue
problems at issue may be had soon.
The report shows that 93 state banks
and trust companies with aggregate cap
ital and surplus 81 S9,l5l 306 have been
converted into national banks and en-
| tered the system since the passage Of the
act. Nine state banks and four trust
companies with capital and surplus of
| SiT $4,000 have been admitted under
| their own charters, with the understand
ing that they viii accept regulations for
the conduct of business made by the
board. Applications from 81 other such
institutions, which prefer to wait for the
issuance of regulations governing their
admission, are pending before the board.
The report reviews the steps which
led up to the decision to put the banks
in operation November 10, declaring that
after getting opinions from great vari-
ETY. of sources, it found such a diversity |
that it was guided by its own estimate
OF the proper moment.
Events have since shown" it says, /
'thst the opening Of the institutions |
was wisely timed to synchronize with /
the restoration of activity in our export
trade. When the financial anxiety which /
pIfAhiitl uhiAHE hAlt tNiNFl HHAN VI Int
past summer and the difficulty which
was then experienced in getting banking
accommodations at reasonable rates,
even upon security OF undoubted solid
ity, are recalled, the substantial inn
which has taken place since
becomes evident, and is a remarkable
tribute, not only 70 the recuperative
power of American commerce and indus
try, but also and largely to the bene-
of thenew banking system" !
LESS than five moAths have elapsed,
saws the report since the introduction !
into our financial system of the most
change that has been made (
In the field Of American banking since
The passage Of the national banking act. :
Less than two months have gone by \
since the federal reserve banks actually /
opened for business The system, how .
ever, is in operation and has already pro- J
lueed results OF the most noteworthy j
haracter. e
"There is much vet to be- done, but [
he work cannot be regarded as expert. {
mental in the sense that there is any
as TO the outcome. The only Il
question is as 10 how rapidly il will be o
'bSEANif 10 uFNflWU AAt AMlA AMHdNAAAAAfo -
nd resources Of the federal reserve sys. q
en-. Its potentialities are vast and n
hould contribute immeasurably in the p
uture TO the solidity, stability and flexi- q
ility OF .ae American credit systems.
"The question, however, naturally sug- &
ests itself and must be frankly faced n
shat is the proper place and function q
the federal reserve hanks In our bank u
" and credit systems2 On the other pl
and il il represented that they are II
lerely emergency banks 10 be resorted al
) for assistance only in time Of abnor- -
al stress; while on the other IL l. q,
aimed that they are in essence simply q
lditional banks, which should compete d
ith the member banks, especially with n
lose OF the greatest power. The func- at
on of reserve bank Is not 10 be identi.
a with either of these extremes, al. Oh
cough occasions may arise when either al
such courses may be imperative. lts 20
ity plainly il not 10 await emergen- ~
rs. but BY anticipation 20 do what IL IN
n 70 prevent them. at
SO also ~ al any time. commerce. ad
dustry or agriculture are, IN the opin- tie
n Of the federal reserve board. bur Be
ned undulv with exeessiye interest NJ
arEes, it viii BE- the clear and impera- va
fe duty ~ the reserve board. acting coi
rough the Discount rate and open thi
arkct powers. 20 secure a wider difu. hrg
~ If credit facilities at reasona be rates. h.
'sfhe ready availability II it, resources fal
If supreme Importance IN the conduct Gle
q reserve hank Only then win Il
nstantly carry the promise of being
ie o. protect business against the
rmful stimulus and consequences of pro
advised expansions ~ credit on the bui
: hand. or against the ulenacn Of un-
iural restrictions and unnecessary con act
.etians IN The otbef with eKorbitant and
es ~ interest and artificial atrinran- ~
a. u should b. ~ al times steady estl
! infuence. lehdiuE when and HhereI
dership is requisite. but never allow ING
fself 20 haoomc an instrument for cimi
promotion 81 fhf selEsh interests ~ IRA
/ private ~ sectional aroup. - thsir pas
as and uat hsds open - disguised. iics
Time and experience uln slru uhat Inl
seasuual variations in the credit de-I H
nas ard faeitie= in eaeh III tha rn 90
rs lanks ~ thr affeFal Hsf~frfn afU rtni
and vhHn ard a. whst ertenf re- 80
re hsuk NAY. uthguf violating ns erai
fiai funct i1H as q ruarliar s.f banking 81
Tras, engage IN banking and credit D
- inrs ann
r. fast an8 raurlea sfrassu4a II itl