The Birmingham age-herald., 1916-03-22
Institution Is Destined to Be Great Factor in the Development of Country and Foreign Trade
RESERVE SYSTEM
 IS EXPLAINED BY
 BANKING EXPERT
Bankers Responsible for Fact That Farmers of Alabama Have Never Di- yersified,. Says Walker

J. B. Pike, cashier of the federal re- serve bank at Atlanta. and Alex E. Walker, .superinte aldent of state banks were the principal speakers at the ban quet rendered the members of Group 2 of the state bankers at the Tutwiler last night by the Birmingham bankers. Col T. O. Smith presided as toastmaster. MT. Pike spoke on The Federal Reserve Sys- tenn" and Mr. Walker spoke on Rural Credits" Emmet Jones. chief of the state bureau of markets, was called on and told of the work his department is doing
 'The federal reserve bank is not an il .stitution, it is gun instrument It is a tool in the hands of the banker members to be used by thel n to supply the needed capital for the development and upbuild- ing of the town ;tnd the territory they serve.' said J. B. Pike, cashier of the federal reserve .basnk at Atlanta, in an address to the ns1nbers of Group of the Alabama bankers at the Tutwiler last night.
 Under the federal reserve system, there can never be another currency panic such as We had in 1907,'' he said. "The bankers generally have not yet fully real zed the tremendous advantages offered them by the reserve banks There are practically no limitations to the use that can be made of this agency so long as there is a sound basis for the credit de- sired.
 s4O,O0O, ,0OO TO LEND
 ''The federal reserve bank at Atlanta has already loaned $36sO00, 900 in it's terri tory. We have discounted 24,O0O separate notes and with our resources we are pre- pared to lend as much as $40, 1000 at one time. This institution is destined to be the greatest fact or in the development of the country and will be the chief means of extending the foreign trade of the United States. We are now planning SC me amendments to the reserve bank act which will rerolutionize methods of doing business in this country and put all financial transactions on a much safer and sounder basis.
 Shortly before the war in Europe started we were Tacing a serious condi- ton in this country. We owed England n}iilioGs of dollars and that country was calling for our gold. Within a short time we had paid them all we owed them and had loaned then half a billion dollars more. After the war is over, this credit we have established in England will be of just as much service to us as that much gold If we owe England money and she calls for payment, we will simply return her collateral until the loan is paid, thus keeping our gold at home
 ''We have at least S1, ,000, 900, 600 in gold in this country now which can be the basis for 8, ,0O0, ,000,0O0 or s4,0O0,O0O00 in credit The federal reservea banks can greatly add to this sum, so. there is practically no limit to the money that is now and will be available in the future. The na- ticnal bank laws prohibit the banks from making loans in excess of 10 per cent of their capital to any one person or firm. However, under the federal reserve banks there is no limit to the amount that can be loaned any one.
 INDUSTRY PARALYZED
 When the war started many lines of industry were paralyzed and but for t',e