The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1915-01-29
RESERVE BANKS HAVE RE-
VlVED BUSINESS IN U. S.
Continued from page one).

were created because of the existence
of certain common needs and inter-
ests, and they should be administered
for the common welfare-for the good
of all.
'"rhe more complete adaptation of
the credit mechanism and facilities of
the country to the needs of industry,
commerce and agriculture-with all
their seasoned fluctuations and con-
tingencies-should be the constant aim
of Reserve Bank management. To
provide and maintain fluid condition
of credit, such as will make of the
Reserve Banks at all times and under
all conditions institutions of accom-
mediation in the larger and public
sense of the term is the first respon-
sibility Of a Reserve Bank.
at should not, however, be assumed
that because bank is Reserve Bank
its resources should be kept idle for
use only in times of difficulty, or, if
used at all in ordinary times, used re-
luctantly and sparingly. Neither
should it be assumed that because a
Reserve Bank is large and powerful
bank all it's resources should be in use
all the time or that it should enter in
to keen competition with member
banks, distributing accommodation
with free and lavish hand in under
taking to quicken unwisely the pace
of industry. Such a policy would be
sure, sooner or later, to invite disas
ter. Time and experience will show
what the seasonal variations in the
credit demands and facilities in each
Of the Reserve Banks of the several
districts will be and when and to what
extent a Reserve Bank may, without
violating its special function as
guardian of banking reserves, engage
in banking and credit operations. The
Reserve Banks have expenses to meet,
and while it would be mistake to re-
gard them merely as profit-making
concerns and to apply to them the
ordinary test of business success, there
is no reason why they should not earn
their expenses land fair profit be-
sides, without failing to exercise their
proper functions and exceeding the
bounds of prudence in their manage
ment. Moreover, the Reserve Banks
can never become the leading and i'm
portant factor in the money market
which they were designed to be I'M
less a considerable portion of their re-
sources is regularly and constantly
employed
"f-.ra "-,N Eo { -or when he TrCa-
weight of their influence and resources
should be excrtad to secure 4 freer ex-
.cnsion of credit and an easing o.
rates in order that the borrowing
community shall be able TO obtain ac
commodation at the lowest rates war
ranted by existing conditions and be
adequately protected against exorbit-
ant rates of interest. There will just
as certainly, however, be other times
when proficiency and proper
regard for the common good will re-
quire that an opposite course should
be pursued and accommodations cur
tailed. Normally, therefore, consid-
cradle proportion of its resources
should always be kept invested by a |
Reserve Bank in order that the re-
lease or withdrawal from active en- !
ployment Of it's banking funds may al |
ways exercise beneficial influence.
This is merely saying that to influence
the market Reserve Bank must al
ways be in the market, and in this
sense Reserve Banks will be active
banking concerns when once they have
found their true position under the
new banking conditions.
at would be a mistake, therefore,
fulness to regard the Reserve Banks
simply as emergency banks. Regula-
ton in ordinary times, as we'll as pro-
lection in extraordinary times, may be
expected to become the chief service
which these institutions will perform.
The Federal Reserve Board is fully
alive to its opportunity and respon-
sibilities in their respect, but it must
counsel patience in awaiting the frui-
ton of the new system. 1t will take
time for the new banks to develop the
technique of control and skill and ex-
perience in it's application. The as
certainment of the correct base from
which comprehensive operations
should begin; the establishment of a
normal level from which expansions
and contractions will freely take place
will have most important bearing
unon the future DEVELOPMENT and sue