The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1916-09-27
IF THE WHEELING 1NrELLIaENcER
EDITORIAL SERVICE OF THE WHEELING iNFih'N
THE FEDERAL RESERVE BANK
Better Understanding of the System Should Be Devel
oped Among Bankers and Business Men.
By SEYMOUR S. COOK
Cashier Federal Reserve Bank Of Minneapolis

Establishment Of n system OF true re.
lserves, an elastic currancy. ana
means for rcdisCount. - were lrnlneu'-
lately accomplished upon the open,nR
of the Federal reserve hanks on NJ
Irember l6. 1914. and az rap IDLY AZ poh'
sible the subordinate provisions nave
been put into effect.
In providing for the rediscount OIL
commercial paper by the federaI re-
lSerye banks. the business publlc mus
itself relieved from the constant men.
ace it has heretofore faced Oh neihS
Unexpectedly and ineXoraDly cSlIcu
upon 10 meet It's note obligations: NOW,
when a member bank finds Itself con
fronted by an unusual demand for
money because conditions are either
abnormally bad or abnormaily eoou,
instead of calling unon its borrowers
to pay up, or refusing needed aaal-
Itional loans, the member BANK can
meet the situation by rediscountlhs
with its Federal reserve bank. Ihis is
mot privilege, but right.
! Failure of the National Bank ACT OF
1853 10 make adequate provision: ior
lelasticity of National bank note. clrCu-
lation caused deep concern ID tns
minds OF thoughtful business men ana
students of finance for more than a
'of 1907 afforded an object lesson SUI
;ficiently servere to result in legislative
action The year following, Congress
passed the Aldrich-Vreeland act when
lopened the way for the Federal re-
serve act. 1t was through the con-
ltinuation of the life of the former I'M
it'll the Federal reserve banks were IN
actual operation, with their facilltles
for prompt and economical Issue OF
currency, that the United states was
saved, upon the outbreak OF me nv
iropean war. from what would prop
ABLY have been the most disastrous
manic in its history. Provision for
icurrency both sound and elastic, com
ibined with ample and impartial op.-
portunity for rediscount of commercial
|paper, furnishes a guaranty OF exist
ence to properly managed member
banks. and through them to business
Interests Recognition OF this TACT 10
acting like oil upon troubled waters,
and is enabling business enterprise 10
ride safely ard almost undistruDed
Through the storm of the European
jconf1ict
I In putting the federal reserve sys-
item into practical operation the mem
bers of the board. as well as the onl,
/ GERS and directors Of the banks, have
had many difficult problems pre-
sented. and few except those closely
in touch realize the study, wisdom,
Ipatience, tact, executive and technical
ability involved in their solution. A
spirit of cooperation and sincere
desire TO render valuable and patriotic
service have ben continually in evi.
dence. One by one the provisions OF
the act have been interpreted, and as
rapidly as a careful study Of methods
and Of the effect upon business would
permit, the federal reserve board has
put them into operation. All that is
now needed to bring the system 10
point of maximum usefulness is bet
ter understanding of its possibilities
on the part Of both bankers and busi'
ness men.