The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1915-01-28
|VEWCURRENCY
ACT NO|LONGER
AN||E|:IPE||:|R|NE||NT
Gays First Report of the Fed.
eral Reserve Board to
Congress.

WASHINGTON. Jan. %. The
first report Of the Federal Reserve
Board covering the development
which preceded the opening OF the
twelve regional reserve banks last
November and the two months in
which they have been in. actual oper-
alton, was just sent to Congress. It
announces that noteworthy results al
ready have been accomplished and
that the system now cannot be re-
garded as experimental in the sense
that there is any uncertainty as to
the outcome" No Legislation is asked
for. the board deyoting Its report
chiefly to an outline of how the new
system has strengthened the nations
financial situation.
Noteworthy Results.
LESS than five months have
elapsed says the report, since the
introduction into our financial system
Of the most far-reaching change that
has been made in the field OF Ameri-
can banking since the passage OF the
National Banking Act. Less than
two months have gone by since the
Federal Reserve Bank actually opened
for business. The system, howv-
er, is In operation and has already
produced results Of the most note
worthy character.
There is much to be done, but the
work cannot be regarded as expert
mental in the sense that there is any
uncertainty as to the outcome. The
only question Is as to how rapidly It
will be possible to develop the full
capabilities and resources OF the Fed
eral Reserve System. Its potential
tiles are vast and should contribute
immeasurably in the future to the
solidity, stability and fexibility of the
American credit system.
1.-THE question, however, naturally
suggests itself and must be frankly
faced: what Is the proper place and
function of the Federal Reserve
banks in our banking and credit sys-
tenn? On the other hand, 1t is, rep
resented that they are mercy emer-
gency banks to be resorted to for as
sistance only in time of abnormal
stress; while on the other 1t is
claimed that they are in essence SIM
ply additional banks which should
compete with the member banks es-
pecially with those Of the greatest
power. The function of reserve
bank is not to be identified with
either Of these extremes, although oc-
casions may arise when either OF such
courses may be imperative. It's duty
plainly is not to await emergencies
but,by anticipation to do what it can
to prevent them. ~.
$50, also II, at any time, commerce.
industry OF. agriculture are, in the
opinion OF the Federal Reserve Board.
burdened unduly with excessive in
terest charges, 1t will be the clear,and
imperative duty of the reserve board
acting through the discount rate and
open market powers to secure wider
diffusion of credit facilities at reason
able rates.
Steadying Influence.
THE ready availability of its re-
sources is of supreme Importance in
the conduct of a reserve bank. Only
then will it constantly carry the POM:
Use of being able to protect business
against the harmful stimulus and con-
sequences VI 1ll-duVlSeu expansions
of credit on the one hand, sor against
the menace Of unnatural restrictions
and unnecessary contractions on the
other, with exhorbitant rates Of inter-
est and artificial stringencies. 1t
should at all times be steadying in
auence, leading when and where lead
ership is requisite but never allowing
itself to become on instrument for the
promotion, of the selfish interests Of
any private or sectional group, be
their aims and methods open or dis
guised.
thine 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 reserve bank may,
without violating its special function
as guardian Of banking reserves. en-
gage in banking and credit opera
lions.
1.-The vast and complex structural
OF modern banking and credit sys-
TENS IA one of, extreme delicacv ofl