National banking under the Federal Reserve System

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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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Document type:: Monograph

Structure type:: Chapter

Title:: Growth of the national banking system

Collection:: Economics Books

GROWTH OF THE NATIONAL BANKING SYSTEM Foreign banking There were no American banking institutions maintaining branches in foreign countries, and the organization of such foreign branches was necessary for the proper development of our foreign trade. Loans on real estate The inability of national banks legally to make loans upon real estate restricted their power to serve farmers and other borrowers in rural communities. IV UNDER FEDERAL RESERVE SYSTEM It is often said, and generally conceded, that the Federal Reserve System saved the United States from financial chaos during the European War. With equal emphasis it may be said that the national banking system made the Federal Reserve System possible. The national banks (particularly in the early days of the Federal Reserve System’s existence) supplied not only the skeleton for the Reserve plan, but they supplied likewise its sinews—its very life-blood. Two elements, in analysis, were necessary to make the Federal Reserve System a success: first, capital for the twelve F ederal Re- serve Banks; second, support and use of the facilities offered by those banks. Both of these elements the national banks supplied. The Federal Reserve Act itself provided that each national bank should be a member of the Federal Reserve System and should subscribe to the capital stock of one of the twelve Federal Reserve Banks. The alternative, in effect, was surrender of the charters of those national banks which did not see their way clear to join the System. In other words, when the government was ready to put the Federal Reserve System into effect, it found already in existence an eminently strong banking system, reaching to every point of the national compass, able to subscribe the necessary capital, lend the necessary support and cooperation, and “make the system march.” The non-national banks, likewise, rendered invaluable cooperation in the launching and operation of the Federal Reserve System. At the end of 1925 there were 1441 State bank and trust company mem- [19]

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