New-York tribune., 1918-06-23
American Banks
Constitute Foch's
Money Reserves
Pierre Jay Urges State
Banks to Join Federal
Reserve System

NEW LONDON, Conn.,, June 22.-An
urgent appeal to all banking institu-
tions operating under state charter to
join the Federal Reserve Bank system
was made to-day by Pierre Jay, chair
man Of the Federal Reserve Bank OF
New York, in an address made before
the members Of the New England
Bankers Association in session here.
"rhe time has arrived" declared Mr..
Jay, "for every strong, well-managed
state institution to join the other banks
Of the country In maintaining this sys-
tenn, which must furnish every dollar
Of the immense credits which America
and the Allies will need to win the war.
"If the American army is Foch's mil
itary reserve" he continued, "the Fed
rral Reserve system is Foch's financial
reserve, for it is not only the only res
ervoir Of credit in this country, but
the last in the world, just as America
is the last available reservoir of avail
able man power in the world. And the
reason we feel perfectly certain the
state institutions will join the Federal
Reserve system when once they under
stand the necessity for their member
ship is because to maintain our full
fighting strength and unity in France
we must have our full credit and finan-
cial strength at homo as we'll, and we
l.; u
ing organization is given such strength
and such unity, and given it imnaediate-
ly, as will enable it to respond instantly
and unhesitatingly to any demands
made upon it, however great they may
be, and still keep strong.
"We believe there is just as distinct
a financial service for our banks to en-
list in as there is military service for
our boys to enlist in. On the average
there is soldier in every family in
this country. There is also soldier
in every bank in this country, and this
! soldier is it's reserves, its unused credit
power. But just as the human soldier
can fight no battles if he stays at home,
but must put on the uniform and get
into the organization and go where he
is needed, so the banking soldier can
fight no battles unless it, too, puts on
the uniform and gets into the organiza-
tion, at least for the period Of the
war.
Seriousness of the Situation
"But why do the state institutions
hesitate to respond to the Presidents
call for complete mobilization of their
reserves, which is no less urgent to
them than the call Of General Foch
to America for infantry, infantry with
out limit?
"Not because they are unpatriotic;
their patriotism is just as ardent as
that Of the national banks, and they
have given evidence of it every day
and every week since America entered
the war. Primarily, l believe, because
they have not given membership the
serious consideration which the seri-
ouaness Of the situation demands and
which / am here to endeavor to i'm
press upon you; and, secondarily, be-
cause they fear membership will i'm
pose some cost upon them, although
I am satisfied that this fear will in
most cases prove q delusion.
"But does not the spirit in which
America entered the war give US a
safe guide for the decision of many
Of the war questions which perplex US
IN our private and corporate lives7
America did not count the cost in en-
tering the war. Nor did America enter
for dollars or territory. She entered
the war to give her last man and her
last dollar to achieve victory for
principle. So her people, in every part
Of the land, are asking one another
and are asking the government not
what profits they may reap out Of the
war. but only what they can do, what
sacrifice they can make, how they can
help to win the war. And the reason
we feel perfectly satisfied that the
state institutions are going to join the
for the period Of the war, is because
these same people who in their private
capacity are offering to make every
sacrifice for the war are the officers,
directors, stockholders and depositors
Of the state institutions, and just as
soon as they understand how vital, how
necessary it is for their institutions to
place their resources behind the sys-
tenn, those institutions will step for
ward in body, eager to respond to the
Presidents call for complete mob
ilization Of our banking reserves and
ready for the burden and the privilege
which the President said must be
shared by every banking institution in
the country"
MIR. Jay told Of the rapid growth of
tho Reserve system, calling attention
to the fact that in a year its deposits
b00000,000. The demands on it's credit
power have increased proportionately,
he said. The Federal Reserve Bank