The Birmingham age-herald., 1915-05-19

stantial, and justify very great sympathy for the probable future of the law. You know the establishment of the federal re- serve banks and the passage of the fed- erai reserve act are only steps in the development of our national progress In the direction of banking reform. They are only part of that which had it's begin ming back in the spring of l9eS when Con gress passed the emergency currency act and provided for the appointment Of national monetary commission. We of the south think we had a hard time of It last summer. when the declaration of war abroad upset all of our plans by the ef- feet that was at once exerted upon the export market for cotton, but t is diff cult to imagine inc extent of our disas- ters and the depreciations of values throughout the entire country, If We had not issued millions of currency upon the assets of the national banks. a great deal of which performed no other service than restoring confidence. The existence Of the Aldrich-Vreeland law. and the prompt amendment of some of its provisions. and the setting them in operation, a task in which members Of the then unorganzed reserve board participated, was of inestl- mahe value to this nation Save Tor tLese operations of the federal reserve system. the bank accommodations upon which the industries you represent must TtlAt NtuAu nave ItUidiHtu tttdHFtb 1o they were the early part of the past sea son. ll.Kl
 Felt Benefits Already
 Further extension of credit was vouchsafed to the l2 districts. thus insur- ing some distribution of the good effects, 1 by the operation of the rediscounting ma chinery of the bank in each. Any panic will suhside with the general circula- tion Of credit over a considerable area by the making of loans at lower rates Surely you will agree that we have already ex- l ing and currency reform, and fortified l by that, will view the further develop- ments of this subject with much conf dence and cheerful assurance.
 l Let us look at the possibilities of the future es they may depend upon reason- | able accomplishments of the new system, l of banking.
 l Section 1S relating to the rediscount- ing operation of the federal reserve banks. 1 makes eligible the notes hills drawn l for agricultural. industrial or commercial
 purposes, or the proceeds of which have
 been used, or are to he used for such purposes. II declares against the elgi- hility of all paper covering merely invest-
 mcnts. or issued for the purpose of carry. ing or trading in stocks bonds or other investment securities.
 | twill not the operation of this sec tion of the law tend to divert from cer- tain speculative and nonproductive cham nels funds for use in some of the pro- cesses of production, or as defined by the federal reserve board producing, pur chasing. carving or marketing goods il
 one or more of the steps of the process
 of production. manufacture and distrlhu
 tion?
 ''The practical good of the elasticity Q
 a currency system is of course anparen
 to you when you reflect upon the sev
 eral times In our history when the hand
 ling of commodities and the general tren,
 of business were seriously retarded h,
 the fear which took hold of depositors
 supernduced by a scarcity of actual cur
 rency at certain seasons of the year. "If the new legislation as 1t is now he ing developed shall prove but the begin
 ming of changed banking methods whicl , shall contain the clements of a greate | circulation of credit. and you gentlemen
 and others who are engaged in tho mar
 keting of commodities. can reap the ben
 eft of a greater circulation of credit ca
 rean the benefit of a reasonable assuranc , of finding lenders when you need capl tai for commercial purposes, then indee will banking reform have served an ad
 mirahle purpose in the general scheme 2 improvement. You are interested in tn
 chief function of the federal reserv
 banks the rediscounting of paper fc member banks, Not because yo uneed ? , all times greater volume of credit faci tiles, but on account of the assurance ths