Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-01-28
FIRST REPORT OF
RESERVE BANKS
NOTEWORTHY RESULTS AL
A ACCOMPLISHED;
PAST THE EXPERIMENTAL
STAGE. e..
ARE TO inspire Confidence
Function Of the Reserve Banks Is
Not Extreme, But to Relieve
IT, Any Stress,
ARE TO inspire Confidence

Washington, Jan. 27-The first re-
port of the Federal Reserve Boaro'
covering the developments when
preceded the opening of the twelve
regional banks last November n
the two months in which they have
been in actual operation, was sent
to Congress today. 1t announces
that noteworthy results already have
been accomplished and that the sys-
tenn now cannot be regarded as ex-
detrimental in the sense that there IS
any uncertainty as to the outcome.
Na-legislation is asked for, the board
deyoting its report chiefly to an out
line of how the new system has
STRENGTHENED the nations financial
situation.
-, .>"A Far.reaching Change. =
LESS than five months have elaps-
ed" says the report, since the IN
PRODUCTION into our financial system
of the most %far-reaching change that
has been made in the field of Amerl-
. can banking since the passage OF the
National Banking Act. Less than
two months have gone by since the
Federal Reserve banks actually open
ed for business. The system, hoWev-
er. is in operation and has already
produced results Of the most note
worthy character.
''There is much yet to he done, but
the work cannot be regarded as eX'
detrimental in the sense that there is
any uncertainty as to the outcome.
The only question is as to how rapid
", It will he possible to develop the
full capabilities and resources of the
Federal Reserve System. It's poten-
tialities are vast and should contri-
butte UNNECESSARILY in the future to
the solidity, stability and flexibility
of, the American credit systems.
The Proper Function.
1.-THE question, however, naturally
suggests itself and must be frankly
faced: What is the proper place anG
function of the Federal Reserve
banks in our banking and credit sys-
tenn, On the other hand, it is rep
resented that they are merely emer-
gency banks to ,ibe resorted to for
assistance only in time of abnormal
stress; while on the other it is claim
ed that they are in essence simply
additional banks which should com
pete. with the member banks espec'
tally with those of the greatest pow
err r. The function of a reserve bank
Ia not to be identified with either o:
these extremes, although occasions
may arise when either of such courses
may lbe. imperative. Its duty plainly
is not to await emergencies, but by
anticipation to do what it can to pre-
vent them.
-a ~,,i,af To Relieve Stress.
$50 also if, at any time, commerce,
industry or. agriculture are, in the
opinion of the Federal Reserve Boaro
tburdened unduly with excessive IL
terest, charges, it will be the clear
and imperative duty of the Reserve
Board, acting through the discount
rate and 0Pen market powers to Sc.
cure a wider diffusion of credit facii::.
ties at reasonable rates.
THE ready availability of it's re-
sources is OF, supreme Importance in
the conduct of a reserve bank. Only
then will it constantly carry the
promise of being able to protect bust.
ness against the, harmful stimulus
and consequences of ill-advised ex'
pansiops, of credit on the one halo
or against the menace of unnatural
restrictions and unnecessary con
fractions ycn the other. with exhorbi.
tant rates of, interest and a%rtifcia:
s%tringeLcies. It should at all time;