Evening star., 1922-06-25
SENDING GOLD BY WIRE II
THE LATEST in BANKING.
Project lnaugurated by the Federal Re-
serve System Has Proved an r.
Unqualified Success. ::

serve Board the amounts credited TO
other federal reserve banks on the
previous day. These necessary credits
and debits were entered on the books
and the gold thus transferred "ou-
the wings of lightning"
Slate Clean Each Day. 49,
But even this was not entirely sat
isfactory. for there was delay of 4
few hours and banks began business
in the morning without knowing
their exact gold balance. So on
March 1, 1920, the time of telegraph
ing the debts and credits was
changed to the close of business and
before banking hours on the follow
ing morning each bank was notified
of its gold balance. This is the sys-
tenn today.
The plan is startlingly simple and
yet effective. 1t illustrates how
present-day business methods have
supplanted the old. and to what an
evolved. The gold standard is pre-
served. gold transferred by wire and
modern business made possible with
almost inconceivable swiftness. All
this would have made business men
of a century-nay, half century
ago gaze with awe and admiration.
perhaps with doubt and fear. But
it has all come about so naturally
and so easily that 1T is taken as a
matter of course today.
Available to Commerce.
This, gold settlement fund" and
private-wire system is available not
only for the transfer of the gold Of
the banks, but is an available and
valuable service to the commercial
interests of the country. The cost
is borne by the federal reserve banks,
and permits the transfer of funds by
telegraph at par. 1t is available to
individuals or firms as well as TO mem
Der banks. Funds, or what amounts
to gold. are transferred from bank
to bank. the specified amount in the
gold settlement fund passing from
the owner ship of one bank to another.
and the transaction is complete
Customers are charged nothing.
Obviously the government. the
banks and the public profit by this
system, the latter more than is under
stood. Credits are transferred quickly
and safely, the gold settlement fund
aiming as the great reservoirs. AL
ways remaining at an approximately
steady level by reason of the ebb and
flow of the credit and debit stream.
Wire transfers at par are a new
feature of our banking system. and
make the credit system of wider scope
and utility. 1t makes possible the
handling of great volumes of business :
with unprecedented rapidity. 1t null
tiplies the potency of the whole cur
reacy and credit system of the coun-
try. Nor does it alter or Jeopardize =
what is called the gold standard. 1t
widens its own field of operation and
demonstrates the power OF confidence
in the business world.
Hard on Train Robbers.
The success of the experiment and
plan has made the old gold shipment
by express obsolete, and perhaps
made less desirable what was once
known as express train robberies.:'
1t has brought the different parts OF
the country into closer business re-
/ lations, and put an end to sudden
monetary crises coming out of clear
sky. The golden electric fluid can
be sent into any market or any city
or state. and Immediately turn
threatened panic into confidence 1t
is even suggested that the same
principle be applied to international
affairs. and an international gold fund
be established, thus avoiding the
shipment of gold from one country
to another. Obviously this cannot be
done until all countries, particularly
European countries, get back on
gold standard basis. ,,.
So far as the United States is con-
cerned. this gold settlement fund"
has proved a marked success and
demonstrates the genius of American
financiers and the progress of Amer
ican business. Nothing is too swift
for an American business man. %