Evening star., 1917-06-03

en-. which. in the final analysis, is the
safeguard OF ALL"
The second reason is: "At a recent
meeting of the executive committee of
the American Bankers Association the
trust company and also the state bank
section adopted resolutions fully in
dorsing tho federal reserve system and
recommending that state banks and
trust companies favor legislation that
/ Will enable them to cooperate with
federal reserve banks"
The third reason recites the privileges
OF redtscount extended by the federal
tho purpose Of aiding in trade and com
merce or carrying on trading in notes
or bonds of the United States.
ANY member bank Possesses assets of
this character and may be assured the
right to convert such assets into cash
at any time. thus assuring legitimate
expansion Of currency in proportion to
the needs OF the commercial community.
Reduction in Reserves.
The fourth argument advanced refers
to the reduction of required reserves
that must be carried by federal reserve
member banks. and the safety in the
strength given the banks by the con-
centration of their reserves in the fed-
eral reserve banks. Some states have
authorized the lower reserve. but have
Tho federal reserve board has ex-
pressed = willingness to accept state
examination of banks where the exam-
nations are OF character satisfactory
The sixth and last argument for uni.
fcation follows:
According TO data compiled by the
federal reserve board some forty-ons
Of the forty-eight states have. either
expressly or by implication. authorised
state tA No
come members Of the federal reserve
system. but in q few Of these states
deposits with the federal reserve banks
do not count as part Of the reserves
required by the state laws.
TT 10 earnestly sugGested that wher-
ever that Is the case steps should be
| taken by the proper authorities to
| amend the law 30 as to permit these
deposits to count as part of the legal
! reserve and thus to remove what 10
otherWise very serious handicap to
state banks or trust companies locat-
ed In those states"
The circular as a whole contains
| nothing not fully known and UNDER
stood by every banker in the country.
Liberty Loan Money.
The money subscribed for the liberty
country. but is being expended for the
government and its allies in the United
States. in the great steel factories. in
the purchase of munitions, rifles.
clothing. shoes. etc. so that 1t goes
| at once into circulation very soon
after it is paid in on account of the
bonds.
Steel to the amount Of $4,000 tons
10 called for by the Bethlehem Steel
and Midvale Steel contracts. Another
ings for shells, and minor contracts
placed call for $4,000 additional tons.
SO the f1res OF business and industry
are kept going.
Casting Bread on Waters.
That is what the bankers are doing
now: educating the United States in
bond buying. so that when the liberty
loan issue Is placed. there will be mil
hons of bond buyers whore today there
are but 100000 investors in bonds in
the United States. 1t is advertising
on huge scale. ea
On Taxation Problems.
The National City Bank circular for
June contains an exhaustive essay on
the problems Of taxation.
The following Is an excerpt:
There are sound reasons why an Inn
portant share Of the expenses Of the
ing the war. Most lines Of business
are under extraordinary stimulus.
profits are e@iarger than usual. wages
are generally higher. and the employ
ment of the peopls~is very complete.
Therefore the country can afford to
pay taxes now better perhaps than 1t
kwill be able to- in the years following
the war. whenSit may be suffering from
reaction. Moreover. the industrial ca
pacity and labor supply of the country
Is occupied with war business to such
an extent that It 10 impossible to go
Al6h3Swith constructive work in othAx
nnSS usual The current income -
the couAtry must Of ns1ssitKxh b. wRNE8
over largely to the governmentysfk
to carry 81 seas -
ton oetwse.,sesSs