Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1916-12-27
u. S, SEEKING TO
BE WORLD BANKER
Naming Bank Of England Cor
respondent, Government
Bids for Foreign Trade.
RADICAL CHANGE IN POLICY
Move Is This Country's First
Step Along Line; Stops
Gold Expectation.

WASHINGTON. Dec. 26.-Thc GOV
crnment yesterday took its first formal
step thru the federal reserve board
looking To the establishment Of finan-
cial connections abroad thru which II
hopes 20 strengthen the position Of
the United States az world banker
and TO maintain the American dollar
as the standard of exchange
Under a section of the federal re-
serve act the board authorized the ap-
polntment of the Bank of England as
Il foreign correspondent OF the federal
reserve bank Of New York and an
nouncod that the II other reserve
banks might participate in the agency
rC latiOns
Connections with other foreign gov
ornmental institutions, such as the
Bank of France. is foreshadowed. Of
ficials say,Iby today's action. The Bank
of England * the foreign correspond
ent whose appointment has been au-
thorized since the operation OF the new
financial system in this country.
Reserve Board statement.
In It's statement announcing the ac-
tion the board said:
'"rhc federal reserve board has au-
thorizcd the federal reserve bank of
New York TO appoint as one of its for
eign correspondents and agents tho
Bank of England of London. England,
under the terms of the federal re
serve act
Section II of the act permits any
federal reserve bank with the consent
of the federal reserve board to open
and maintain banking accounts In for
eign countries. appoint correspondents
and establish agencies in such coun-
tries whcresoever it may deem best
for the purpose Of purchasing, selling
and collecting bills of exchange and
to buy and sell with or without its in
dorsement thru such correspondent or
agencies, bills OF exchange arising out
of actual commercial transactions so
that a broad field OF operations is pos
sible under II.
With Bank of England.
"In granting the authority to estab-
liSh this agency the board has author
lied the federal reserve bank of New
York to maintain accounts either for
or with the Bank OF England, so that
operations both in England and In the
United states are possible.
"Other federal reserve banks may
participate in the agency relationship
with the Bank OF England upon the
same terms and conditions that will
govern the federal reserve bank OF
New York. il they so desire"
In addition To being the first step
by the government toward going after
foreign business, II is understood that
authorization Of this appointment is a
part of general plans for establishing
fina ncial connections that will
strengthen the United States as a
creditor nation in the commercial
competition which probably viii result
when the war closes unl to provide
ready means to offset any tendency on
the part of the foreign bankers to
withdraw the huge supply of gold ac-
cumulated here during the war
Marks Radical Change.
The action marks "a radical depart
ure from the previous financial policy
of the country inasmuch as IT places
the government of the United States
and Great Britain for the first time In
direct continual financial relationship.
The first effect. II is thot, Will be
noticeable I'm transactions which might
otherwise involve the expectation OF
gold from this country as the connec-
tion with the Bank of England will
a fford a channel thru which American
banks can readily purchase British
notes and securities to meet any ten
dency toward gold expectation. II also
will tend. officials believe, to bring
about a better feeling and under
standing between the bankers of the
two countries. Whether operations
thru the connection will he extensive,
officials admit. is difficult of forecast.
they might be on tremendous scale,
it WAS said, and on the other hand
might be comparatively light In vol
ume.
The effect Of the relationship
probably will he studied carefully be-
fore similar authorizations are made