Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-06-18
Address of John H. Rich
Before Bankers of State
Federal Reserve Agent and Chairman Of Board Of Directors Of
the Federal Reserve Bank Of the Ninth District Talks on the
Reserve Act and Its Application to Present and Future Busi.
ness Conditions in This Country. -. 4Esa

Ave years hence will be like. We may
all feel certain that a much greater
importance awaits us in North Dakota
and throughout this great northwest.
ern country. These states have al.
ready become a solid and substantial
part of the Union and If they fulfill
their natural destiny, they will be,
come the homes Of many millions OF
our citizens in the future, and in these
thriving cities and towns there will
be built up great commercial institu'
tons, which will be required to salts.
fly their demands for the natural com
forts and conveniences Of life. .g'.
The Reserve Act. s-
in considering the place which the
Federal Reserve Act and the new sys'
tenn of banking is to have in the
United States, | think the best view
point is the one which comprehcnds
what has been done in the past and
properly approaches the work that
lies ahead Of us In the future. We
must not consider it solely in the
liSllL " plCSCllL CO1luAIloAAo, DSSouS
present conditions are subject to very
rapid change. The machinery of bust
ness which satisfied all requirements
yesterday becomes inadequate to the
problems of today. AS we Look for
ward into the tomorrow Of our bust
ness and financial life, wemust OF
necessity be strongly impressed with
the fact taht we must make better
and larger plans than before. In Am.
erican banking and finance this is
especially true, and the time has al
ready come when the machinery OF
credit must be overhauled and made
capable OF sustaining heavier bur
dens.
1t is rather surprising to consider
the changes that have come about in
banking during the past few years,
In both st. Paul and Minneapolis
there has been a pronounced move
ment toward the creation of larger
and better banks than any We have
had before, to serve the tributary
territory. The smaller banks, which,
always perform a valuable service in
amy community, have been rapidly
increasing their strength and ! their
ability to- be Of service to business.
Along with this movement, which
was simply a response to the increas-
ed commercial and agricultural de,
mands of this whole northwestern
country, there has come the creation
of the federal reserve banks. Twelve
of these were to be established in the
Unitd States and there was a general
feeling that the interests Of the North
west were SO important that this ter.
ritory should have it's own federal re.
serve bang, rather than be made a
part of thebterritory assigned to the
federal bank OF Chicago The organ
iation committee. which had the Gre
alton of the various districts in hand,
wiselyl' decided to include Montana.
North and South Dakota and Mime.
sota,s which .ist2a natural territorial
unit in a district by itself. In order
to- provide sufficient banking capital,
the north two.third" of Wisconsin and
the northern peninsula Of Michigan
were also included. This territory
was set aside as the Ninth Federal
Reserve district and was given a fed.
eral reserve bank Of its own, which
the organization committee, after
careful investigation, decided should
be established in Minneapolis.
THE founding of a strong federal
reserve bank in Minneapolis will
have the effect, in time, of greatly
solidifying any. strengthening the
banking power of the Northwest. 1t
seems to be the opinion in New York
that many Of local banks will
reduce their New York accounts. and
bring their money back for use at
home The officers of the Ninth Fed
eral bank believe that this will trans.
pire and that the effect will be to
make the Northwest more independ.
'ent than before. The establishment
Of the federal reserve bank has
strengthened the hands of all Of the
national banks in this large district
and, in giving them a better degree
Of safety and protection that they
have eve had before, will enable
them to be Of greater service than
before to their own home communi-
ties. +
Gives Reasons.
ITO my mind it is highly import
ant that there be a proper under.
standing of the reasons for the recon.
structioE of the old banking system.
The foundation %princviples of the
Federal Reserve act are cooperation
and service. Cooperation cannot be
.one-sided. 1t takes two to make a
bargain, and the cooperation that Is
sought under this new banking act is
essentially a bargain between the
government and the banks, under
which the government has agreed
that 1t will extend to all Of the banks
that join the new system 4 greater
degree of safety and protection than
they have ever enjoyed before. 1t
has required of them in return that
they extend to the government their
helpful cooperation in making this
new system of genuine and practical
service to all o fthe people Of this
country. The United States cannot,
thrive and prosper unless credit is
freely extended on every hand to all
those who should rightfully enjoy it.
The new bank act will in no way re-
lax the proper banking precautions Of
the past, nor will it provide credit
for those who have nc assets but
good intentions. The banks and the
working hand in hand
under this new system, both sincere.
ly underwriting to realize its best