Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1917-10-19
WILSON URGES BANKS TO
Join FEDERAL RESERVE
Speedy Wartime COnSOIida-
ton of Gold Resources
Is Desired

WASHINGTON. oct. l6.-An appe
by President Wilson to the eligible no
member state banks and trust compani
OF the country to join the federal reser'
system is relied upon to effect a gener
and speedy wartime consolidation of Il
nations gold resources. The expects
universal compliance with the pres
dents call will mean the mobilizati'
of more than three billion dollars
yellow metal under the supervision
the federal reserve board. and a tangib
assurance of Americas stalwart fina
cial stability.
The presidents message is address,
TO more than 5000 financial institution
with resources of between twelve al
sixteen billion dollars. whose busine
is carried on under the sole control
state banking laws. Affiliation with Il
federal reserve system will bring the:
within the pale of nation
PRESIDENTS STATEMENT.
His statement follows:
Ii is manifestly imperative that
there should be a complete mobiiiza-
tion of the banking reserves of the
United states. All who are familiar
Preciate the importance of developing
to the maximum our banking power
and of providing financial machinery
adequate for meeting the very great
financial requirements imposed upon
our country by reason of the war.
A vigorous prosecution and s1tis-
factory termination OF the war will
depend in no small degree upon the
ability of the government not on'E
to finance itself. but also to aid the
governments associated with 1T in
the war, which must be kept sup
piled with munitions. fuel, food and
supplies of all kinds.
The banking problem involved is
one which concerns all banks alike.
Its solution does not depend upon
the state banks. The burden and
the privilege must be shared by
every banking institution in the
country. The important functions
of the federal reserve banks in the
sale of the governments securities,
in receiving and transferring the bill
lions of dollars involved, in supply
ing credit facilities and in protecting
the reserves of the country. have be-
come so familiar to all that l am
sure il is unnecessary to dwell upon
or expound them.
The extent to which our country
can withstand the financial strains
for which we must be prepared will
depend very largely upon the
strength and staying power of the
federal reserve banks. The federal
reserve act is the only constructive
legislation which we have ever had
which was broad enough to accom-
modate at the same time banks oper-
ating under powers granted by the
general government and banks
whose charters were granted by the
respective states. The unitication of
our banking system and the COM
plete mobilization of reserves are
among the fundamental principles of
the act.
The state banking institutions for
some reason have until recently
seemed inclined to hold aloof. Con-
gress a few months ago prescribed
very generous terms for the admis-
sion of the state banks into the fed
eral reserve system, which have re-
moved the objections heretofore
raised by state banks when consider
ing membership. AS the law now
stands, il leaves member state
banks and trust companies practi-
cally undisturbed In the exercise or
all the banking powers conferred
upon them by the states. The law
provides also in definite terms the
conditions upon which any state
bank or trust company may with
draw from the system.
Many of the largest state banks
and trust companies are now be-
coming members, realizing that to
win the war we must conserve all
of the physical, financial and moral
resources of our country-that our
finances must rest on the firmest
possible foundation, and that they
must be adequately and completely
conserved so as TO respond instant
ly to every legitimate demand. How
can this necessary condition be
brought about and be made per-
manently effective better than by
the concentration of the banking
strength of our country in the fed
eral reserve system?
Nav 1 not, therefore, urge upon
the officers and directors of all nom
member state banks and trust COM
panies which have the required
amount of capital and surplus to
make them eligible for member
ship to unite with the federal re-
serve system now and thereby
contribute their share to the con-
solidated gold reserves of
the country? l feel sure that as
member banks they Will aid to a
greater degree than is possible
otherwise in promoting the ma
tional welfare. and that at the
same time. by securing for them
selves the advantages offered by
the federal reserve system, they
will best serve their own interest
and the interest of their customers.
l believe that cooperation on the
part OF the banks is patriotic
duty at this time. and that MEM
bership in the federal reserve sys-
tenn is a distinct and significant
evidence of patriotism.
There are probably eight or nine
thousand state banks and trust
companies eligible for member
ship which have not yet united
with the system. These institu-
tions have il in their power to add
enormously to the resources of the
federal reserve banks, thereby
broadening and strengthening the
foundation upon which our whole
financial structure MUST rest. Per-
nit me to urge that every bank Of
ficer and bank director owes a SOL
emn obligation to the country.
which l am sure they wish to dis
charge. I, therefore, wish again