The Federal Reserve; A Study of the Banking System of the United States (Paperback)

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1915 edition. Excerpt: ... CHAPTER II HISTORY OF BANKING REFORM MOVEMENT Deficiencies in the national banking system were perceived comparatively early in its history, but did not make themselves felt in a way so serious as to enlist active effort for their correction until about twenty-five years after the system had first become operative. Moreover, during this period of twenty-five years, the difficulties which were most seriously felt were not those that afterward caused most annoyance and led to most active effort for improvement. Probably the first inconvenience that was experienced in the management of the national circulation after the national banking system had been definitely created and the Act had been amended to meet the earlier requirements of the conditions then existing, was the prospect that the supply of Government bonds, available at prices that would enable the banks to put out circulation based thereon, would be insufficient. In 1880-83 this problem had become acute, due to the fact that the twentyyear bonds which had been issued by the Federal Government during the Civil War at 5 and 6 per cent. interest were expiring, and the question what should be done in connection with them was unsettled. This problem was disposed of by refunding the bonds for another twenty years, and thus enabling the national banks to get the securities they needed as a basis for their circulation. With the growth of the great surpluses of revenue during the decade 1880-90, a new type of problem appeared; for the purchases of bonds made by the Treasury Department, in order thus to use up the surplus, had again brought the bonds to a premium and made it questionable whether the maintenance of the circulation on a satisfactory basis providing for the issue of enough of...