The De Soto County news. [volume] (Arcadia, Fla.) 1898-1924, 1916-12-07
THE FEDERAL RESERVE BOARD
WARNS THE BANKERS.

The federal reserve law has already
demonstrated to the AnCiican people
It's worth. Few peorlo believe but
that If there had been no federal re.
serve at the commencement Of the
war. we would have La panic. In
fact, we believe that money matters
were so mich in coItr j If Wal street
that II panic could be ordered by
them at will. Not so now.
Again the Federal Reserve Board
comes forward and gives some timely
and needed advice to the bankers of
the United States. They warn them
to avoid locking up their funds by
purchasing treasury bills of foreign
governments, inviting long term OBJ
legations, While disclaiming any in
tention TO reflect on the financial
condition of any nation, il is good,
safe and sane advice, considering the
financial condition Of Europe and the
uncertainty of peace. 1t is believed
by those who know the situation that
this warning is the answer Of the
board 10 the recent proposal Of ]. II.
Morgan x Company, British fiscal
agents in this country to have Amer.
lean bankers accept British treasury
bills Of an indefinite total issue. Sc.
cured 10y gold reserves in Ottawa
These loans are for ninety days with
the privilege Of renewal for five 9th.
er ninety day periods. 70 this fpa.
ture Of the Loan the board has This
to say:
The form which the most recent
borrowing is taking apa" from ref.
eIcnce to its intrinsic merits. makes
il appear particularly att'p"tivn as
a banking investmen. The board I'M.
Gerstands that it is expt ted to place
Il primarily with banks.
while the loans may he short in
form and severally may be collected
at maturity, the object Of the borrow.
er must be to attempt to renew hem
collectively, with the result that the
aggregate amount placed here will
remain until such time as IT NAV be |
advantageously converted into a long |
term obliga ton. II would. therefore |
seem as a consequence that liquid |
funds Of our banks. which should he
available for short credit facilities 10
our merchants, manufactures, farms.
would be exposed To the danger Of
being absorbed for other purposes to
disproportionate degree.
I'm the opinion Of the hoard, it is
the duty IF our banks to remain liquid
in order that they may be able to
continue TO respond to our home re-
quirelncf ts the nature and scope Of
which none can foresee, and in order
nat our present economic and fnan-
,ial strength may be maintained.
when, e. the end Of the war. we shall
wish to do our full share in the work
# international reconstruction ana 5
development, which win then liz
Ihead of us, and whcn a clearer I'm. |
ierstanding of economic conditions )
Is they will then exist, will enable
his country more safely and intell-
gently to do its proper part in the
rehabilitation Of the world" /
While it is not the duty of the s
BOARD to advise private investors, this {
to all is needed, and no per- I
son or body Of persons could have {
given it as well as the board. The l
which the people have in
t will make its opinion worth some
hing when that Of a private person
n body would he discredited.
To tie up too much of our capital
broad at this time would endanger
'ur own financial condition, and Il
he worst comes to the worst. who I
.nows but that these countries, i'm
overished and exhausted nv the war, "
nay repudiate their debts?