Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-12-31

Peculiar problems undoubtedly
must be faced by the Federal re-
serve system and it's member banks
uurihS tho coming year. The fact
mat conditions have developed on
me whole more satisfactorily during
io22 than had been expected. and that
the banking system as Il whole is
now In an exceptionally strong po-
Sition is made clear by an analysis
OF current reports to the Federal Re-
serve Board. as we'll as by the def
hltc statements to that effect found
IN The report Of tho Secretary or
The Treasury. Mr.. Mellon points out
mat there has been very substan-
'idl Increase ia liquidity. lons-tern
and frozen obligations being reduced.
while tho Federal reserve banks
themselves have shown remarkable
power to contract. just as they have
previously shown unusual capacity
To expand.
innk Service Iinuucsti0nrd.
Tho year 1922 has also been n nc
Rod "f much happier and better re.
iationships than was 1871. Few or
none have questioned the adequacy OF
inc banking service that has been
rendered to the community Money
rates have been low and credit has
teen so abundant TO all legitimate
borrowers that 1t was not even ncccs-
adry for reserve banks TO rcdiscouut
among themselves. as they have been
W. 'h: habit OF doing during the past
'hr'e years. This ought to have
brought about a much more satisfac-
tory legislative situation, but instead
81 mat II ~ probably true that there
mas never been 80 great a rnul,itudc
~ hostile bills in Congress ar there
arc today. Indeed. with tho session
Just opening work has ALREADY been
hcIun upon rural credits measure
which may result in something al.
most approaching disaster should /,
ho allowed to become law ON tho
mes already Indicated Whether /,
VIII do so or not IS still uncertain.
Out IN the meantime las already
stated III" year 1922 has been a
period of unQucstioucd efficiency In
banking service in practically al!
parts of tho country
system Faces DnnEcrs.
There is undoubtodIy recognition in
"nic!al circles Of dangers by which
IN" banking system Is confronted
ana as Il result q S;rong disuosItior
evidently exists among politicians to
Try :" piacatc tho general public.
which leans towards initiation. Wi;M
'hIs attitude" prevalent the question,
near !uiurc y Very serious TN
""nht"dly th.y ought I" be raised.
"hd ihht without much delay. since.
IN" prevalent MARKET rat. is nvy:
distinctly ahead ~ tho reserve rate.
tui the question whether They can
hc disposed az srontiNcaIly is :,
problem 81 growing ginicul,y. csp.c.
ANY 80 view "l the widespread be-
Let mat low rates rt r,s,ry. bank,
. -
'h"u-i ~" such connection has ever
No. 20 established u our bunRInr sys.
''i't Grave danger is sans seen to
""f!""i "nr t;i:.:.r..:l institutions.
''"i W"T'ly rum tltc standpoint %.
ie" j. -isl"t."u bu, also In TIA. mat.
'"r "s EdiuiH ,vaItN" policy. due TO
'N" uns'tilcd p"iitIcal situation
Nhi'h now prevails Al Washington
scattering of COLD.
h' question whether ID is WIS.
md right to allow tn" vast gold a.
nmu!nt.ous to become scattered
'hr"u%h 'he country merely IN ord. r.
:" prevent AN unduiy nigh ratio
iI"m showing itself At reserve bau,ts
does not seen! ON tho surface to al.
mt Of two answers II IN" COLA
were NORMALLY ours and could t..
'Nr""i"d To remain mere indefinitely
'hcr" might be- argument .or this
'"l'ry but the gold Is no, ours in
any tru" sense. and i, mag bo vcrv
reasonably cNpoc tcd that the time
MI! come IA the early future when
IS" shall he called on To transpor,
substantial. par; Of IL to foreign
'"un'ricS IN order to get back to a
i""tin4 "t gold redemption. That
"rInS th- case. the plan OF seeking
1" ray out the metal now being ar
rl'ed by Tho Treasury appears in
'feaSinSiy questionable. The gold
Question Is probably ono that viii
nave l" he dealt with in SOM. states
ihdnii r way IN the near future. II
las not been dealt with in that way
mus Tar pUrnS The war We pur-
sue! tn" policy Of accommodating %,
conserving gold, and since the war
our policy has been such as 10 com
PEI ior"iSn countries to pay -us in
sold Al: much as possible. The re-
cent Fordncy- McCumbcr tariff has
carried this policy 10 an extreme
limit. and should il be kept in cf-
feet viii undoubtedly result in stiil
iur'hrr charging our gold holdings.
NJ tho same time, however. We
sock to pay out the gold. although
we all recognize that a good deal
"f IT must go back to Europe If
european countries are to be able
30 get back to the specie standard
at any time in the near future.
Membership OF Federal Reserve.
The hazards of the coming wear
are not entirely international, nor
d" they relate wholly to legislative
matters. There is undoubtedly a
growing feeling Of dissatisfaction
with the Federal reserve system This
is seen in moderate withdrawal of
members and failure to expand mem.
Dcrship further. hut il is moro cvi-
dent IN the dissatisfaction which
mas led To efforts TO break down
the par collection system and is like
~ To lead eventually to a demand on
the part OF country banks for lccis-
lation looking in that same direction
Apart from this. is the fact that not
rev members of this system have
heen repealed by the political attI-
tUdc of tho administration towards
IT and arc today inclined to with
draw, in tho absence OF general
revision Of policies and also of meth
obs on tic part OF those who arc
now in authority. II seems likely
that very considerable revision OF
our banking policy may become nced