Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1916-02-15
MORE COMPLETELY REALIZE
PURPOSES or IIttNEHS

tric' or another district.
MORE CoMpLI:TI:rY REALIZE
PURPOSES Of i'IstNERS
az &c believed" says tho report, "thnt
the enactment Of ,nos. amendments
VII! b"sid"s charging the usefulness
I OF the national banks result ~ ,,reI,Iv
acknowledging tn" operation Of tho
Federal reserve act. and more COM
Bple'cly realize the purposes Of It's
trainers"
Tn" board announces tina, i does no,
CONSIDER that Il can direct the business
operations OF Federal reserve banks (,
RESPECT "a foreign loans. Ia, tina, it's
function is 10 oversee those banks
plea is made in the report Tor tho en-.
trance into the system Of moro state
banks and trust cornpouies
In speaking Of foreign borrowing; in
the United states, tho board points out
that ~ has received many Inquiries on
| TINS sNAj"c', and has given thou care
ful att,ation |, has reached the con-
clrsiou, II says. supported by com
intcnt legal advice. that the purpose
for which goods arc sold Or exported.
or the use 20 which such goods arc
ultimately put" does no; fall within
II. province or Jurisdiction.
N" the report adds. ",h. trans
actions which have given rise 10 such
sales or shipments arc OF q true com
mcrciaI nature, n the basis upon which
they rest Is such as 10 comply with the
requirements OF the Fedora! reserve
act. and II tho maturity Of the Loan
1 ,alls within the Limitation Of the law
then the paper growing out OF them.
no matter by whom or for what drawn.
Ia 81,
reserve banks, ANA must hc regarded as
falling within the legitimate sphere OF
their operations. The Federal reserve
act makes no provision for collateral
bond or stock loans or for the purchase
OF foreign governments obligations by
reserve institutions. Neither such OBJ
1 legations therefore. nor loans 10 mem
her banks based thereon are eligible
as investments for Federal reserve
hanks
The operation Of tho reserve system
is a matter of business TO he conducted
In accordance with the terms Of the
Y reserve act and the regulations Of the
board It il not the province OF the
board 10 deal with problems involving
| International relationships OF tho
Snited states. either for the purpose
OF restricting or extending expectations
IN one direction or another. The cligi-
biiity OF paper for reserve banks Is
determined by considerations which
are valid under one set Of inter
national relationships as another; the
function OF passing upon and dealing
In such paper under these regulations
belongs 10 the several reserve banks.
| The board, however. believes that the
financing OF the country's export trade
lie 81
important financial problems with
which the nation has to deal: and it is
of tho opinion that Federal reserve
banks cannot. even if they would avoid
the responsibility of assisting In this
process Of financing what lcgitimately
and properly dcvolves upon them"
WANTS QUESTION SETTLED
by THE SUPREME: COURT
The board expresses regret that in
some States suits have been Instituted
| to test tho validity of tho provisions
or the reserve act by which il may
grant certain nduciary powers to ma
tional banks. announces it's intention
to have it's counsel intervene in these
cases and says that every effort will be
made to have the question settled by
he Supreme Court at nH early date. II
is pointed on, that only thirty-two
. state banks have been admitted to the
. system. and cightyfour others have
ONE in by conversion into national
| banks.
! 1T is rcercttablc," continues tho re-
oort. that In not a few States reserve
| requirements for state banks and
rust companies have been matcri;-ly
,owercd by Legislative enactment since
he adoption OF the Federal reserve act.
The only Justification for the rctllc-
ZION Of the reserve requirements for
oational banks is tho fact that the ma
!iOnal banks are members OF the Fed
.ral reserve system, and that the Fed
.ral reserve banks hold part Of the
| consolidated reserve of the national
banks and are therefore In position to
'nmc Immediately with all OF their
| scsources TO the support OF national
banks in case Of necessity or emer-
.ency."
On tho other hand it Is stated State
banks have reduced their reserve re-
luircments without tho support Of the