Federal reserve banks open today with capital of $20,000,000,000
Washington, Nov. 16 — The biggest bank the world has ever seen, the Federal Reserve bank, capital stock $20,000,000,000, designed to prevent panics and give elasticity to our currency, opened its doors for business today. In twelve cities, Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco, the regional banks formally became members of the federal reserve system.
The inauguration of the Federal Reserve bank today marks a complete revolution in Uncle Sam’s currency system. Its builders claim it will keep too much money from flowing into Wall street to the detriment of the rest of the country, enable one sector of the country to better aid the business of another section in time of stress, and thus by keeping the money supply evenly distributed and more easily available, cure the country of the panic disease which has been recurring about every twenty years for the past century.
The way it is going to affect the average person is something like this: If John Smith in Kansas has a wheat crop that he wishes to move and if Kansas is short of money then the federal reserve board will aid the Kansas City regional bank in getting money at any or all of the other eleven regional banks. It may be that Atlanta hasn’t the money to spare, or that New York may be financing foreign shipments, or that Boston needs her money for the mills, but San Francisco may have plenty of cash to spare. If so, then the San Francisco money will be used to move the wheat crop in Kansas, the entire system of credit being so coordinated and linked together as to have banks act as a unit in helping each other, so that there should never be a stringency as has happened many times in the past but that the entire resources of the whole country should be ready on demand to help any needy section.
This continues the Appeal’s review of news stories and headlines during its Sesquicentennial year.