National banking under the Federal Reserve System

Bibliographic data

Monograph

Identifikator:: 1757542345

URN:: urn:nbn:de:zbw-retromon-135097

Document type:: Monograph

Title:: National banking under the Federal Reserve System

Place of publication:: New York

Publisher:: The National City Bank of New York

Year of publication:: 1927

Scope:: 154 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Growth of the national banking system

Collection:: Economics Books

GROWTH OF THE NATIONAL BANKING SYSTEM in the United States, whereas in the same month of the final year of the period, bank note circulation was $722,000,000, or 19.49, of the total money in the United States. The year 1918 is taken as the termination of this period in the national bank system’s history, because that year marked the passage of the Federal Reserve Act which had such a far-reaching influence on the entire system and which altered it in so many essential fea- tures. For many years it had been obvious to close students of finance that the nation’s banking system, splendid as it was in many respects, contained many defects, and that the whole might be so altered that the individual banks could be of even greater service to their particular communities and to the country at large. During the few years just preceding the passage of the Federal Reserve Act, careful and comprehensive studies of banking in the United States were made by various competent agencies. Probably the most exhaustive of these inquiries was that followed by the National Monetary Commission, which, after the most diligent labor, presented a plan for the entire reorganization of our banking system. This plan, generally known as the Aldrich scheme, was not adopted by Congress, but the Congress which came in after the election of 1912, turned its attention forthwith to that banking plan which was ultimately embodied in the Federal Reserve Act. The National Monetary Commission, in its report, had detailed seventeen criticisms of American banking. This body of criticism provides a splendid commentary on our whole banking structure— national, state and private—before the passage of the Federal Re- serve Act; it gives, moreover, a vivid picture of the causes from which the Reserve Act arose. A summarization of the list of the Monetary Commission’s criticisms follows, and is included here be- cause it gives, in the briefest way possible, matter that is essential to the understanding of national banking. Reserves 1—There was no provision for concentrating the cash reserves of the banks and for their mobilization and use in times of need; 9— Inadequate federal and state laws restricted the use of bank reserves, thus decreasing lending power; [17]

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