Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-11-25
FEDERAL RESERVE
PLAYS LARGE PART
IN FINANCING WAR
System Created at Opening
of Conflict Aids in
Many Ways.
RESPONSIBLE FOR HELP
TO AMERICAS ALLIES
Floats First Liberty Loan With
Only One Month of
Preparation.
STOPS COMMERCIAL FAILURE
Nation Prepared for War Through
Greater Elasticity Of
Currency.
ny Il. pARNEIt WILLIS,

~ II. PARNEIt WILLIS,
Secretary Of the Federal Reserve Board.
NO great service is ever rendered
snd no srca; task performed without
a long period OF preparation. lndi-
vidua,s who meet emergencies sue
cessfuly have been trained and have
accumulated the experience which en-
ahlcs them 10 meet the demands upon
them when these arise. Systems must
have been organized. mus; have per-
fccted their details Of operation. and
mus, have accumulated the strength
aud RESOURCES TO do what is demanded
os them. SO when il ia asked what
the Federal reserve system has done
in tho European war and how 1t has
served the nation we cannot answer
without retrospect that goes back
for a considerable period.
Creation and organization OF the
Federal reserve system were very
nearly ccntemporaneous with the
breaking out OF the war against Ger
many. The act itself was signed on
December IS, 1918. and the process OF
preparing for the opening OF the banks
was going during the nrst half OF
the ensuing year. The Federal re-
serve board was appointed on August
10. 1914. ten days utter the conflict
actually began. The banks themselves
were opened OH November .. 1914, and
began their actual service as banking
institutions soon after. Even before
the banks had been opened, however
| the organization was being used
fast as it was brought into being in
order 10 meet the unprecedented de-
mants brought TO bear upon this coun-
, ,l,1 - rT-i.-
eral Reserve Board had an important
share in devisins and putting into cf-
| feet the special measures of relief
which the exisencics OF the time ce~
cd for
The 800. 100000 gold fund whi,..
aided in the restoration OF normal ex
change rela tionSh.ps between the Unit
ed states aud Great Britain. the cotton
( loan fund created 70 relieve tho very
serious situation IN the South resulting
from the temporary stoppaSe OF for
eisn trade. the plan for the retirement
! of emergency currency issued IN
der TO enable national banks, and.
through them. State banks and trust
companies. TO continue payments dur
ing the autumn OF 1914. are among
the most striking examples Of the work
done By the FEDERAL reserve system
then in it's earlier stages to relieve
tie business and financial community
OF the shoc! OF war and TO render nos
Sible the great industrial ,ran5forlna-
lions which were TO follow So much
I mat IL noteworthy in commerce. fl
nance and industry has occurred since
me actual beginning OF the war that
T! these even now seem almost like an
ctent history. but they must be re-
"A la
system to the support or the nation
IN PERIOD OF stress and crisis that
Nigh; otherwise have wrecked its bus
mess, or might at least have so Sc
! r!ohS!% crippled II TO limit II in 4
most serious way in subsequent &C.
tivi;i5s
RESPONSIBLE FOR AMERICAN
BUSINESS MANS HELP
Between these early undertakings
ana tho ,nomen: when The United
states Itself became a participant in
IN" war against German aggression is
Sh"c" q: ahout two and one half years
mat period proved 20 be "a time OF
enormous business activity and result
ing prosperity in the United states
Few persons who review the events Of
that time probably consider that had
IL not been for the development or an
efficient banking system afIi.iatins to-
Scthcr the scattered financial units o,
the country. strong and weak. our ex.
pcrience must have been Very different.
With tho a;. o; ,hc new system.
which thus came into existence In the
very nick of time. however. American
business men ~ / nnanciers were able
To make TO tho conduct OF the war
abroad that great contribution, which
is usually ignored entirely forgot
ten During that time We exported
$1,000 100000 of merchandise in excess
vauced in loans to foreign countries
probably abou, :e.5cO,ooo,oOO. beside
renurchasirs something like An equal
amount OF orr own securities which
they had been holding.
We thus III no small measure assisted
N tina ncinE and carrying on the war
from the very beginning. and from
some points o! View this aid was, per-
hapa. greater and more effective than
would htvc been possible lad wc our
selves at Il 1t limo been active shar-
crs in tho conflict. That this could
not have been done without the eS-54
la,ence OF some strong banking or
SANITATION able to create the Heces-
sary confidence and ia assist the banks
Of tho nation in applying their re-
sources 10 the uno-ccedsntcd task be-
for" them il merely the statement OF
an opinion. No ono car say With cer-St
ia.nt. IN any crisis OF the Kind what
would have happened had events been
Continued on Tenth Page,) 80.