When the Federal Reserve introduced it had many critics it has to-day but they have been reduced a hundredfold. It is now claimed that never again can there be a panic like that of 1907, and the reason is the Reserve. If this is true, then from the standpoint of American business, this Federal Reserve System is the biggest thing thet could have happened in the country. And this is precisely whet one enthusiastic banker claims for it.
"The effects of the war on he writes, with truth applicable particularly to the United States, "are, after all, but porary malters, while the Federal Reserve is the permanent national defence of our industries, our great distributing system, and our coninning prosperity."
What the Reserve Docs: A
Concrete Example. 1
A prominent business man in the country, speaking at the 13th annual meeting of the United States Chamber of Commerce, gave the following concrete example of how the Reserve works: the Federal ies. The merchant or manufactur er, instend of borrowing on his note as against his general credit, re= counts, obtains from his customer fan acceptance or agreement to pay, for a definite consignment of goods a definite time. This' seems simple, but its effect in a country, like this are very far-reaching, For he can at once discount this aeceptanse with his bank or the market, can get his money ime mediately, and close the transaction, If the bank can rediscount these acceptances with the Federal Reserve Bank of which it is a memo ber, it of course releases the mone for' re-lending or addition counting of acceptances for its lee customers, Thus a great te volume of business is possible with avail able local capital, same day the Towa member banks had reserve deposite with the Federal Bt Chicago of $22,008, ins. to the Towa mem! Danks were reduced to about (090,000 os February 48, 1920, the low point for the year, and the reserve Heposits of the Towa member. banks 0 progressed, hard, came more acute. and. the Fede Reserve Bank at Chicago was called upon for help. At the end of 1920
Text read from the printed page and cleaned; old type leaves the occasional error.