The Birmingham age-herald., 1915-01-28
FIRST REPORT OF
 RESERVE BOARD IS
 SENT IllCO!NGRESS
Noteworthy Results Al ready Accomplished by System, Says the
 Report

Washing gtOn, January 27.-rke first report of the federal reserve board covering the developments which pre- ceded the opening of the IF regional reserve banks last November and the two months in which they have been in actual operation, was sent to Con- gress today. It announces that note- worthy results already have been ac- complained and that the system now "cannot be regarded as experimental in the sense that there Is any uncer- tainty as to the outcome.. Ndk1egisIa- ton Is asked for, the board devotins 2 it's report chiefly to an outline Of how the new system has strength thened the nations financial situation.
 Less than five months have elapsed, says the report, ''snce the introduction into our financial system of the most far reaching 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, however is in operation and has already produced re- suits of the most noteworthy character.
 There is much yet to be done, but the work cannot be regarded as experimental in the sense that there is any uncer- tainty as to the outcome. The only ques- ton is as to how rapidly it will be pos sible to develop the full capabilities and resources of the federal reserve system. It's potentialities are vast and should con- tribute immeasurably in the future to the soidity. stability and f1exibility of the American credit systems.
 The question. however naturally sug- gests itself and must be frankly faced: What is the proper place and function of the federal reserve banks in our bank ing and credit system?' On the other hand. it is represented that they are merely emergency banks to be resorted to for assistance only in time of abnormal stress; while on the other it is claimed that they are in essence simply additional banks which should compete with the member banks. especially with those of the great est power. The function of a reserve bank is not to be identified with either of these extremes although occasions may arise when either of such courses may be imperative. It's duty plainly is rot to await emergencies but by anticipation to do what 1t can to prevent them.
 ''So, also, if at any time commerce. in dustry or agriculture are. in the opinion of the federal reserve board, burdened unduly with excessive interest charges, it will be the clear and imperative duty of the reserve board, acting through the dis count rate and open market powers, to se- cure wider diffusion of credit facilities at reasonable rates.
 ''The ready availability of it's resources
 is 0f supreme importance in the conduct of a reserve bank. Only then will it to protect business against the harmful stimulus and consequences of i'll advised expansions of credit on the one hand, or against the menace of unnatural restric- tions and unnecessary contractions on the other. with exhorbitant rates of interest and artificial stringencies. It should at all times be a steadying influence, leading when and where leadership is requisite but never allowing itself to become an instru- ment for the promotion of the selfish in- terests of any private or sectional group. be their aims and methods open or dis- guised.
 .'Time and experience will show what the seasonal variations in the credit de- mands and facilities in each of the re- serve banks of the several districts will be and when and to what extent a reserve bank may, without violating it's special
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