Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1916-02-15

of the reserves of the state banks and
trust companies makes them more yul-
nerable in times of emergency and 1t is
conceivable that situation might arise
in the affairs OF such state banks and
trust companies where they might have
to call upon the credit structure of the
national banks and the federal reserve
system for support when they would not
be entitled to 1t because they had not
contributed to the strength of the fed
eral reserve system by taking member
ship in 1t. The board is giving serious
thought to this question and to the ac-
ton that may be taken to guard against
the consequences of this situation"
This part OF the report is concluded
with an expression of opinion that the
credit resources of the country would be
greatly enlarged and strengthened with
corresponding benefit to business and
the people II state banks and trust COM
paries were to enter the system.
The report declares that condition
of remarkable ease was the outstanding
feature of the country's money market
during the year. 1t says that the ma
tion's export trade has reached high
water mark that manufacturing in near
IL all lines Is active and that II has been
the part of wisdom for reserve banks to
conserve their resources land hold
themselves in readiness to meet any un-
expected developments in the situation"
An increase Of almost a billion dollars in
the combined loans of national banks in
the year and an increase Of deposits of
nearly two billion dollars are pointed to
as pertinent in considering the situation.
THESE facts" the report says, would
seem to indicate that 1t Is prudent to be
prepared for time when the reserve re-
sources of the country will be subjected
to a severe test and when the leader
ship and operations of the federal re-
serve banks will become correspondingly
more influential"
The discount policy of the board dur
ing the past year is declared to have
been the proper one under the existing
circumstances but 1t is pointed out that
as time goes on there will be a disposi-
ton to make these rates as nearly eQuaI
In all parts of the country as is posi-.
BILE. The reserve banks have not beer
greatly encouraged to indulge in such
commercial banking operations as the
law permits, open market opera
tions as the act terms them, the board
says, because thereby the danger Of in
fation might have been increased and
. money rates further depressed. More
active participation In such transactions
by reserve banks may be expected in the
future. ,
, The board, the report announces, il
a considering the establishment Of branch
agencies OF reserve banks in cities other
. than those where such banks are locat'
: ed and for the present does not expect
q TO approve the establishment of branch
reserve banks. The clearing operations
!. of the banks, IT says have proved sue
! cess but too few of the banks have taken
I advantage of this function.
|: Senator Kern, Democratic leader. to
1 day introduced a bill to amend the fed
eral reserve law and permit officers, d.
: rectors or employees of member banks OF
: class A directors OF federal reserve board
to become officers, directors or employees
of other banks, provided they are not IL
= competition with member banks.