Banking standards under the federal reserve system

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Monograph

Identifikator:: 1762969653

URN:: urn:nbn:de:zbw-retromon-142432

Document type:: Monograph

Title:: Banking standards under the federal reserve system

Place of publication:: Chicago

Publisher:: A. W. Shaw Company

Year of publication:: 1928

Scope:: xxxviii, 420 Seiten

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part V. General summary and interpretation

Collection:: Economics Books

INTERPRETATION 355 are accorded similar privileges of rediscounting, and, by classes, are subject to the same reserve requirements. They customarily and continuously keep on deposit with cor- respondents a part of their funds in order to meet the financial requirements of trade and industry. These funds, placed at the disposal of city banks, and by them variously invested, are sub- ject to withdrawal on demand, thus giving rise to a flow of credit funds and gold'® from country to city and from city to country, seasonal in part, but tending to repeat itself year after year. Moreover, the purchase and sale of goods and services at near and remote points keep in continual flux not only the state of trade and industry, but also the movement of money and credit into and out of banks, into and out of different parts of the coun- try, into and out of liquid securities and permanent investments. And in this mechanism of exchange, in this state of business, not one but all banks take such part as their resources permit and their specialized or general clientéle demands. The following statement, descriptive of the New York money market, applies with more or less precision to each of the larger centers to which the hinterland, in a banking and financial sense, is tributary. “The New York money market is national in scope, and the member banks in New York City, because of the system of correspondent rela- tionship which characterizes American banking, carry balances for interior banks, both members of the Federal Reserve system and non- members, and lend funds received from out-of-town banks in the money market. It is in the New York money market that sales and purchases of securities for account of persons in all parts of the United States are largely made, and that the large issues of domestic and foreign secur- ities are floated. It is to New York houses that issue and distribute securities that investors in all parts of the country turn to purchase stocks and bonds. Thus the sources of the funds that flow into the New York money market are country wide, and the uses to which these funds are put also represent demands that arise in all parts of the country, particularly in connection with the purchase, sale, and carry- ing of securities. Changes in the condition of the New York money “Some of the more important occasions for interdistrict gold movements are the following: “(1) Settlement of interdistrict balances on account of checks and drafts cleared or collected through the Federal Reserve System, also transfers be- tween Federal Reserve banks for account of member and non-member banks; (2) Government operations in issuing and redeeming obligations and in transfer- ring funds in connection with tax collections, payments on contracts, etc.; (3) in- erdistrict accommodation; (4) interdistrict movement of reserve notes.” Federal Reserve Bulletin, April, 1022. D. 400.

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