Evening journal., 1919-08-21

= lNE'A ~ TITO AulAtU CldNfN. IN ldGl. lIl.
iull use OF The acceptance is hardly
understood except by institutions en-
gagged in foreign trade. The situation
IS gradually changing and the use Of
] acceptances will no doubt be extended
Just as soon as we are through with
war financing Several millions OF dol
lars Of bank and trade aoceptances are
offered for sale in New York every
day, but Deputy Governor Tremans
statement that the volume OF paper re-
volved and circulated in the open mar
] ket in London before the war was
nominally from si,5OOOO0,OOO to 5000
100000, shows how backward we are
In this respect.
"Another great service the Federal
Reserve Bank is performing is in the
development Of an easy and inexpen-
sive method for settlements in other
cities. Payments can be made by a |
Philadelphia member bank and trans |
FER made through our gold fund so /
that credit is available on the books Of 1
a member bank in san Francisco with !
IN an hour or two and these gold set
Elements, through the Gold Fund, can
be made without the expensive and
l dangerous procedure OF former years
! There is now, thanks TO this new ar
! rangement, very little gold expressed
| from place TO place about the country
because the Federal Reserve Bank
maintains reasonable funds at CON
venient points and by the ingenious
operation Of The Gold Fund held in
Washington. payments can be made
anywhere with great ease and no risk
Il need not refer al any length TO
the service rendered the United States
Government during the war in con-
nection with the financing Of the
great loans and the issue Of the Treas
ury Certificates Of Indebtedness, but
you all know how many billions ~
dollars in securities were distributed
through the Federal Reserve Banks
The Liberty Bonds and Victory Notes
issued through the Federal Reserve
Banks amount 10 over s20OOO.O00O00
and the Treasury Certificates Of In
debtedness TO over S22OOO,OOO.OOO
"T'he combined resources OF banks in
The Federal Reserve System are nearly
s2SOO0OOOOOO.
"The combined resources Of the i2
Federal Reserve Banks S55OOOOOOO0.
Willard in Figures Speaks
=. A. LaBold. another assistant cash
or Of the bank, who is somewhat OF
wizard with figures. iu-discussing =
he profits and advantages TO members be
y The Federal Reserve System said y,
n part: o."
For four years and nine months the Br
ystem has been I'm operation. in such gr
successful manner as TO set at alb
aught an the arguments that were ful
dvanced against membership when co..
he Federal Reserve Banks first beqhn on
- s.I, I,.ta
n the great war financing operations trs
nd have demonstrated beyond all ar TIN
ument the great strength Of The sys- bill
I'm and The advantages accruing TO the an
anks and communities by the gath the
ring together OF The banking re- me
ources in this system Through this '
Of resources funds now The
lore from one part Of he country 10 tho
he other, but such funds invariably of
% TO a Federal Reserve Bank I'm one In,
~ another Of the districts, so. there stc
orc the resources Of the system arc ve,
oi depleted Fe,
"The matter Of expense, loss or earn as
lgs due 10 balances not bearing in oy,
crest, etc, and the supervision Of the TN
ederal Reserve Board arc the argu- Ra,
tents We meet most from State insti- no,
ilions considering membership D.,
"ln conuecti6n with expense. quite o,,t
w banks figure on The assumption t,a,
at they carry the minimum amount ,,Ia,
reserve when, as a matter Of fact. -
large majority carry a great deal Of ,,'' 80,
cess reserve. and our present State e''
embers OF the system tell MS that
ey have not lost any money and by ~
wing more flexible resources can uep
ep the money loaned closer and their ,,'a, ,oai
ltemenis OF condition TO us bear lua'
ese facts out. Wer
AS for supervision by the Federal pos
serve Board. some banks feel that recu
rh supervision has been a benefit and tle
ne have ever complained. The sys- sV1
n has proven a benefit 90 the cOun-
at large and banking institutions us
IiVidually and gives assurance TO awe
mber banks OF freedom from panic The
curtailment Of their discount or safel
ding power, and TO the business Is M
Of proper supply OF carr
dit. This Would be true to an even. pape
ater extent il every banking insti- fsccoi
ion in the United States were a aged
mber Of the Federal Reserve sys- pape
}. Think what the resources would dema
Certainly the financial resources onda
lur country should be made as solid "A
NNH0lbits HNuulu DC ducQuateIN and law
lpetently conserved and Instantly re- serve
nsive 10 every demand. This ahso- perie
ly necessary condition can best be mean
Ie permanently effective by the con mean
ration Of the banking strength of ing
country in the Federal reserve sys- reser
The Federal reserve act was a capaC
step in the direction OF banking with
currency reform and TO those who surer
followed the practical operation cor
he law since its inception 10 must on bs
.ratifying to all who are Interested eral
he permanency Of the business made
cture OF our country TO note that whicl
sress with reasonable promptness vault
made such vital changes I'm the law 10 be
ractical experience has demonstrat- reduil
'ere necessary, and that any defects Reser
rovisi0ns which would render mem sunni
lip for the State bank undesirable banks
long since been removed. until excess
ne act stands today. there IS no prescr
lnable or serious objection 10 mem invest
hip. fo. va
ur old banking system showed n OF a :
: lack Of a central reserve holding no mo
cy To those Of YOU who remem- as
conditions in 1907 nothing moro redisc,
be said on the subject. Also ~ NOR
Ved a currency based on govern Nfo,nb,
ponds instead of on liquid assets eral "a
me absence Of any agency TO co with Q
lale lne financial system The Fed respo9