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Show I FEDERAL BANKINf I SVSIEMPRAISEC Richmond Va , Oct 14. Governor Charle3 S Hamlin of the federal re serve board was the principal speak pr today at the convention of the American Am-erican Rankers' association. Gov-j Gov-j emor Hamlin told the bankers that he hoped to see tho new system in ! operation in a short time and pre- L I dieted that it would prove of Immense advantage to the country The European war furnished Go-P Go-P ernor Hamlin with an opportunity, U i compliment the bankers on the spirit I they have shown In helping to restore 1 disturbed financial conditions, but he A ?."vc warning that the problems which J nave arisen from the war should not be attacked so that "the remedies V proposed are worse than the dls- H ease." I He said In nart: "jt "The federal reserve banks are jjj quickly approaching the time ot t opening and operation -s soon as Mi certain necessnr preliminaries have a been accomplished their doors will 1 open for business There is to be jl a conference in Washington on Oc- q rober 20, at which committees repre- senting the directors of the various Hp reserve banks will be present and It is hoped that then an authoritative I I statement may be made of an early date when the banks will open j "Many Important questions now are I pending before the reserve board I Among these are clearances of checks nnd the definition of eligible commer clal paper. We want light thrown upon tbem, and any suggestions ema 1 natlng from your body will be consci entiously considered I Urges Foreign Branches. " I want to r-mphasire the necessity necessi-ty of establishing branches of our t national banks In foreign countries. We have already approved applies tions for two branches In South America Amer-ica and one on the Isthmus of Panama. Pana-ma. Along the lines our financial energies en-ergies should operate to the great benefit of agriculture, commerce and the manufacturing Industries of our country "Our present difficulties do not appear ap-pear to arise from the scarcity of actual money, or bank notes There seems to be an ample supply in the TTnited States and much more can be issued. For example, the total of Aldrich-Vreehnd notes throughout th United States aailable for issue amounts to over a billion, two hundred hun-dred million dollars, while there have actually been shipped to banks only a little over $340.000.000 , in the southern south-ern states alone there are available ibout ?1 69,000.000. whilp there haye been shipped onl between fifty and sixty million. Credits a Real Difficulty. "The real difficulty would seem to be one of credit Mutual trust and confidence have been disturbed A3 to certain great crops, the demand lias temporarily greatly decreased in consequence of the war and value has left its moorings the cost of produc- tlon Ordinarily Buoh a condition I would quickly adjust itself We Blioilld see to it that (he remedies 1 proposed are not worse than the disease dis-ease Itself. "The United States treasury is in sound financial condition It pos-Besses pos-Besses ample funds of cold and am pie power to Increase the gold reserve, re-serve, should it ever be necessary. "It should be rpmemhered that (lupoid (lu-poid paid into the federal reserve hanks will not reach their maximum until nfter the expiration of three rears, At the opening, however, the reserve banks will bejon openUionH with a paid-in capital of about IS millions mil-lions of dollars and reserve deposits of about 250 millions. AsRcts of Banks. "It has been asserted that tho ns sets of these banks when they bcm iperations will give only a limited ending power. It should not be forgotten, for-gotten, however, that this lending power may be greatly increased by the deposits of public moneys which the secretary of the treasury is authorized au-thorized to place with the reserve banks Practically all of the gov ernment revenues could be deposited and the government debts paid by check against such deposits. One can state with confidence that the federal reserve system at the outset will increase the lending power of the national and federal reserve banks by some hundreds of millions of dollars "An amendment now 16 pending In congress, under which member banks may keep all their reserves in the federal reserve banks. This will greatly Increase the lending power of the federal reserve banks. Increasing 'heir power to cope with the present abnormal conditions." |