Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-04-05

thing TO do. and the thing that Con.
gross. had in mind. the reserve board ;e
nov removing the restrictions against
national banks, and giving them All tho
chance possible within the intent of In.
laws.
The Federal reserve system is de-
clarcd 20 have disprovcd already am
other buSaboo that at one time was re-
gardcd seriously. While the act was un-
der discussion there was much unccr-
,ainty whether the reserve banks would
be able to do enough business to paw
their own way. 1t MAS necessary to re-
strict their Investment field in order 10
avoid possibility that they would crowd
ont commercial banks: and with this
restriction II was feared that their capt.
tai might not be probably employed
Fears Are GrOundIrss.
This fear is already shown ground
less. The reserve banks have now an
aggregate paid-up capital OF about $50
100000, and hold cash of about $500
100000 OF which I27O,0Oo 900 is in gold.
They are investing in bank acccptanccs
and In municipal warrants; and the de-
vclopmcnt OF the business OF dealing in
acceptanccs is SO rapid as to make very
certain that these reserve institutions
Will always have ample field for using
their money. 1t is already assured thst
most Of the reserve banks Will pay divi-
dends on July !. which Is distinctly bet
ter than was expected by many even OF
the devoted friends OF the new lcgisla-
ton.
The reserve banks At Richmond. Dali
las and Atlanta, as everybody fully eN-
pccted, have proved the most profitable
because they have had opportunity TO
provide funds for the South at a tme
when il was especially in need OF cash.
All the Northern banks are full OF
money, and not so attractive opportuni-
ties for protit-making have been given
to the reserve institutions in this see
ton.
Tho most remarkable achievement OF
the reserve system, in the opinion OF
flnancIcrs, Is the expansion of tho
country's currency ut the time the war
brought something like panic. and the
quick retirement of that currency as
soon as something like normal condi-
tons were rc-cstablished. For this ac-
complishment credit is chiefly due and
ii is freely given. to the workings OF
the new system.
1t will be remembered that in 1907.
at the time OF the bank panic, great
volume Of what was practically cmer-
gency currency WAS issued; the ma
tionnl banks forcing their note issues
up to the highest possible point under
the laws then existing. 1t was easy
enough to get this imitation started, but
hard to stop it. Once issued, the banks
could not get the notes in and cancel
them. The country had to stand iniia-
tion TO that extent, and grow UP TO II.
! But under the reserve act II has
been found possible to put out emer-
scncy circulation when needed. and 10
| get 1t withdrawn almost Immediately
1t was not needed. This is told In 4
most Illuminating way by the figures.
In CushiOninS Pnnica.
When the war started and business
| all over the world found itself In
trouble. emergency circulation was Is
sued through the new system. up TO a
total OF s3S0.00o.000. The maximum OF
issues was reached about November !
| last at that point. Then with our for
eign trade growing ut leaps ana
bounds. with normal conditions being
restored, with the balance of business
powerfully in our favor, there was no
! need OF the emergency circulation.
! 1t was brought in and Cancelled as
easily and quickly as ii was issued. so
! that at this time there is only about
! SlS,000,000 OF u left outstanding.
| This is considered the complete dem
J onstration of the reserve systems ca
pacity to do just exactly what was
| wanted OF il, in cushioning panics.