South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-02-03
Should be in a Position to
Withstand Probable Drains
of Gold When Euro
pean War Ends.
NATION SHOULD SLOW
UP ON EXPORT TRADE
Further Foreign Connections
May be Looked For, Re-
port HintS-FirSt Year
Shows a Profit.
international News Service

Intermati0na News Service
WASHINGTON. Feb. g. - The
need for placing the twelve federal
reserve banks which constitutes the
active agencies of the federal re-
serve system. in a strong position
TO withstand the probable drains OF
GOLD upon the United States at the
close Of the European war is en-
phasized i'm the annual report Of the
federal reserve board for the year
ended Dec. 81, 1916, submitted TO
the house of representatives today.
The board states that the country
is i'm a strong position owing 10 the
huge balance OF trade. amounting
TO S3.OS9.2OO, 900 in its favor, but
care must be taken 10 regulate the
handling OF the precious metal now
held in the United States lest its use
become disorEanized and initiate TO
"a national disadvantage. The board
states that il has recommended 20
congress amendments 20 the federal
reserve act designed 20 concentrate
i'm the 70 federal reserve banks
heavy stocks OF gold which can be
utilized as a lever with which TO
govern international movements OF
the worlds monetary standard.
These amendments are now under
consideration in congress.
u. :. should Go SLOW.
Backing up its sensational state
ment of last December warning
American banks to eschew too lib
eral investments In foreign securt-
ties. the board says that IL would
ice better for the United states 10
slow up on export trade and 10 per-
init further importauons of gold
than 10 attempt 20 assimilate more
foreign securities than American
banks can safely carry
The board. however. takes oC-
casion 10 warn the country not 10
permit the accretiOns of gold 20
bring about a condition of over-eX-
pansion Of credit which might in
sure to the disadvantage Of the
present credit structure i'm the Unit
ed States.
The heard says that il Is anxious
TO have the transfer of reserves
from tine national member banks 20
the federal reserve banks. which.
under the federal reserve act are
10 De made i'm November. 1917. ad-
vanced SO that no time shall be lost
in STRENGTHENING the gold holdings
of the Il central central monetary
reservoirs.
Marked Progress Made.
The boards report says that while
the business American hanks have
transacted i'm the acceptance field
has not been sensational so far.
marked progress may be expected
during the next year The board
details the circumstances leading up
20 the naming OF the Bank of Eng
land as foreign correspondent for
the federal reserve system through
the New York ba nix and hints that
further foreign expansion OF this
character may be looked for.
SO far as earnings are concerned
the u federal reserve banks have
not been conspicuouSly successful ac-
cording 20 the report. = total OF
S2.15O.999 net earnings are reported
for 1916. Rediscounts for the year
amounted 10 S39.561 00O Although
this business is small. the board
takes the position that the reserve
banks are rot intended 20 be profit
able and viii see their greatest re-
wards only in time OF financial