Speech

Mr. Hwralin h U in parti In behalf of the Federal 'topwrw Soard, I «ish to express© “ say thml's for thie invitation. ‘-he deliberations of your CormwUMl will b® tsetchod with interact by all (studenta of finance* and the eowtry expect® to recaivs fwu it uoot valuable sus£c*tions in tla determination of the lawiy probl^as preaoi«£ upon us for solution. X feel, howor, that ay f(motion today auat necessarily lie for the eest pert that of © listener. lie preeent oriole, caused by the uropeen w , swot brine heae to all of ue the real interdependent of nation*, and the fact that eoixjoroial dinaetor suffered by one nut ion isuat necessarily* in. the long run, be chared by the others, nnd that enduring peace is a eondition to be oou^t for by nil* the duty of the Federal immrm Beard la to administer the Xm as enacted by Congress, and I knee vm ehall oil 11 ©ten udth the deepest interact to the dlatinguiahed aaaber of the House of Keprs~ esntativoo, the Honorable Carter Claes, «ho till shortly oxpound that 1m to you. The genius and painstaking industry of r, niaes, and the Secretary of the Treasury, Senator .won/sea in large uoasturo responsible for it, and no tana in the country is better able ihw ha to espials it, .Is® Federal Reserve .let, tdail© the ia^ediate result of the legislation of the present C©np*©sc, rsprsoent© by no aotne a sudden flash of financial revelation out of a dear sky; it rather etmdo m the cuJL-4.m4.ion of dissuasion Jsr.d debute apreud over wmy years, .hil© it «ea & piarty jsusun, it tme net u partisan ocusurc* Cn final enact mat, it re seised tbs support of saaay she sure glad to forgot political differences^ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis '3m ef thie legislation w laid fey your Aaaoelation ste,, in lt§4, it advoeected the *o~eelled Beltiaor* plan of currency refora. Following this ae«© otter plans,- that of Secretsry Carliele, of the Xndltinapolio Monetary Convention, the ee-called Fowler pi on, and sa»ny ethers# "ext eaate the legislation kn&m am the Aldri eh"*’/ reelt*nd Act, aev on the statute hooks, but & ponded, ’■’one of theoo plows ®e*s.aefl to eatiefy the prmwl n»ede and problem of the /aaoriomi people, and finally there wse evolved the plan prepared by the ’actional ^onHery Qwakkkian, After long, eon» tinwed, dieeueaien, it became evident that the people dletrueted the centred!sailors «fei#h they believed to he involved! in this plan, and m set ion mm taken upon it, ■ As a eulasinatlon of all thorn) of forte, o&ae the federal. Reeerve *«t# which beeeoa la* heMnber 33, iil3, under Its previeione the jaewber banke will be assisted by the Federal Reserve Ranke in furnishing eredit to tbl farsser, the uoreheartt and the euumfoeturer. _.%ee in complete operation, the fund a of the people depo el ted under the national eyeteas viH ho brought together in the vaulte of the raetaber benks, and in the t«elv» Federal ^eerve Seeds*. "he aeeete of these federal Reserve Bunks, and the "owmwrt depesitc ^hleh saoy he oade in the®, will he pledged to atrietly waaereial uses, and c«nnot he mm% for speculative purposes, The saenoy of the people will he kept in eirculatter. and a eyetes* of not# issues ie provided which will in the truest eenae h# both elsetie end amim* I believe that the eoundness of this legislation will eoon bo apparent to all* In. this eenaeetion ale©, 1 wieh to acknowledge the fine spirit aany of the banks end bankers of the -/nited ?*tnt<se have die* plny«*d lr helping to restore the present disturbed financial eondl~ ■ tiene resulting fm* the "uropeeA war. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis &#45;&#45;&#45; 'Jim ivmrlGm ifmpla ham d‘*aon*tr«t«d to t$w- world tns inherent otron^tu end soundness ef the resource® of the Oaitod States, s»d our deti»#«i«eilon Mid ability to dlsehargo ©very international oblijp&iott in gold or'It a full equlirelont. *o this ©ml the country ha® had the bone fit of the states- oanohip and eeund leadership of the <‘r eidont of the United States, ill# trained judgment ef the Secretary of the Treasury, and, m .mil, the able ooepsratien of the Coaptrollsr of the aurrenoy* '3\*rtber- s»re, th® crop Hosing aoney, and the legielation authorising increase Ik the eo-ofellsd Aldrieb-¥r#** lta*id curraney, !»vf c*o** fnr toiwyrda reestablishing norawl conditions* tor present difficulties* do not appear to arise froa th© oo&roity of actual mmy, or its equivalent in honk notes. There sewaes to he an a&aple supply in the United States, end laueh aers am bo issued, If there lo & real need for «aar«. For osuesplo, the total of &drlch-v’reelund not«c throughout th© limited Stats* svalloblo for iesus Ensiottnta to over a billion, two Husidrod ssdllllon, dollars, while there have actually been shipped to banka only a little ever 340 millions.; in the Southern Statu* alone ilwr© i*r® avall&iie obout 169 fidlliono, •sdiile thoro have boon shipped only between 50 and CO Million* The rtsal difficulty wuld seasa to be era© of credit* Mutual truet at id confidence have bon;; dloturbod. In addition* m 'to certain great crop®, tho desaand haa teMperarily greatly <®eor®«*»ed in consequence of th* foreign v«r* «nd» no a result, value hoc left it* flooring*,- the cost Of production. Yhe problwta, norKaaily, eon bo *©rkod out only by a tfisdjtished supply or an increased danand* Ordinarily such a con­ dition wuld <|uiekly adjust itself, but the suddenness of th * shook of war Has led to uawy plans being initiated,, sest of sbieh depend Ui»on assistance trm the national Ctovsrasoeat. ??e should seo to it Digitized for FRASER that tlie m «d|tofi proceed arc not oorse than the disease itself, http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis foi* ns rtMitly, even if effluieieut ?ur the problems, om lm justified if,,in the end, li cm only add to our ooiaiiiercial trouble and p*m«pr even ihekt the foundation!* of our national oredii. fortunately the United States Treasury Is In sound financial oon.Jii.lon. it i*o«Mas«s maple funds of geld end aaple r*rrr to increase the gold reeerve, should it. over *>e necessary. The Federal i.e serve tet turn added to the pceere of tho treasury by provid­ ing that tho !«erotary mty tmm cold bondc to laaintaln the parity of oil forsso of Money lssutd op coined by tho United StatM, as wll as to strengthen the cold reserve, and it le believed that no Geveraaent on earth today is hotter equipped than tho United t totes to deal sdth my financial eiaor^oney, the federal Kow m Banka are aulekly approaching the tim of opening and operation. Vhe di recto re are all elected or appointed, and as seon as eartain necessary preliminaries havn been accotaplished, such m the election of officer®, securing of headquarters, appointment of the ncceosary elerieal force, and other preliftilnariee, their door© •ill open for business. There 1® to be » conference in ' anhlngton on October 20th, at which coiaaitteee representing the director® of the various reserve hanks will bo present and repert a** to progress, and it is hoped that then m authoritative staiaaeot muy be wade of an early date when the banka will open. reserves to be paid into It should be resasafeered that the/federal 'ieserve banks, eiil not roach . their ..maximum until after tho expiration o? three years. At the opening of the eyetaa, however, the reserve ban* a will begin oporations with a paid in capital of e&eut IS taillions of dollars, end reoorve dopoeite of about 250 millions, of which latter net exceeding on® half aujr be paid in in eoiaaercial paper discounted by the sember banks. It has been ..asserted that the assets of these Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis barsk» a!*©« they I: rs ©peratiens will give only a died lending •gmmtm it fihewl*! net bo forgotten, ho wsr, that this leading ,o»r taciy toe greatly iscroasod toy the deposit® of public iaonoye, which th#* flecretary of the Treasury is authorised, at his discretion, to plsoe ntfK the Reserve banks so timed, agents of the treasury; pr&stieaily ail of the Sovoraaeni revenues(excluding trust funds, could be so deposited and the Qvtarmmttl debts paid toy dwcfe against such deposits* ^.oreow, the ^ed^rsl Uosarw eM*t largely laerotteee the lending power of the afaatoer banks toy reducing thilr required reoorves* t;n© ean ctat© with confidence that the Federal «©eerv© system at the outset will increase the lending power of ilie national banfce and tbs Federal Jtaearve anfca toy sou© huntlrodo of aillions of dollar®, and at tho expiration of thro© yearn thi® «dll bo very largely increased, at which tiiae the reserves will all too kept si the r in the vaults of tho saaiaber bank® or of tho deserve bonks* An snen&aent is new ponding in Congress, under wh.ieh .vesibor banks may keep all their reservos in the' Federal ilesorve Bonks. If availed of by tho ej»?saber bcrnko, ai?d to tho extent availed of, this will greatly Increase tho lending power of the Federal Jioeerv© Banks, thus tending to put thsss banks at tho ©waning, aor© nowrly la the position they would to* in after the expiration of three years, and i»cr©**sing their pewr to cope with the present atonorwal condition®. tissue people a*oy be of the iapresslon that the orguni station of these bunks a*us been proeeeding very slowly, but I think setae of the difficulties which have bud to be solved will be reuUsed when we sonsidsr for sxaapls, the choice of tho Sewrasaent directors, of whieh there are three upon the Beard of ©aeh federal oeerve Bank, It was neeeseary te secure os directors osa of ability, experience and high etf*ndin£, who could and would a^ree to attend directors* meetings, and to devote to these banks at the oxpwneo of thoir own private affairs, the tlsan noceeciury for their proper iaanagetjent. "tie vast area covored by tho reserve districts has Digitized for FRASER /has wade this an intensely http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis difficttli preposition to «t*fe out, For sxa^ti, tho reserve district of which is Umj Federal <*e (servo eity covers as* mew®. ©f o w 43yt000 eqaere alios,* wore tium double the area of 'the Sksrmst% fmpim, excluding it® colonial i»aes©»elen». fhit district has «. population ef ate&rly #1* u*Ullone of propie, being greater than that ef the Netherlands, Swsdoa or my South Aaertean iieptibiie, except­ ing Brasil and Argentina. §e, **!»©, the ?edertd £*8s m Bletriot ef hi eh ftm ^rancleo© ie the Federal saeerve oity, has sa area of ever #03,000 square salleo. This area exceeds th© oouabinod areas, excluding colonial peceeeeione, of the Oenaen apire, ?>*»«*, Italy Bid Croat * rit«dn« Eiiaiiarly, th© population of tho Chicago district ic greater then the wa$btn®4 oopuiatione ef fiwJen end the iietherlsnde, or ef ' Belgium and Switzerland. Finally, five of the twoivs Paderal Beearve i tklstriete ere larger in area then the Canaan Sopirt, excluding ite | oeloniei; few of the federal ioserve Districts sure larger th®*} the I total area®, excluding colonies, ef franoe, Italy* Belgian, the othorlands, Denuark end Switzerland* There ere ?«>ny isaportant questions, arising under the law, which are now ponding before the Reserve 5*oard, and «hieh are receiv­ ing ite careful consideration* Among these are clearance© of chocks, the definition of eligible 3o«*a«reiui pai*er, and aeny other important oueetiono. it i® impossible for m to touch upon those hem, I stay say, however, that w© went light thrown upon thou, and any sugges­ tions osamatlng fro =>4 year l>ody will he euro fully end oonsoiontiouely considered. in thio eonaeetion, 1 want to eiaphoai ae th« neeecsity of estahlishifag branch*?® of our rational bsnke in foreign countri#©. «* have already approved a#|Jlieail©8* far U» hrfinohas in South &*«srioa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis md om on the i»thL**o of rmmm., wwi •m fowl that along timm linoa eur financial anergioo shawls oporai# to th# fraat benefit of agrieM'i* turn, ooiwtriT and tho i»anu ffeaturing ind&etrioe of our country* In conciuoion. 1 v/ieb to n&y thut th# ^©rtor&l mmrm Boerd le fully Mindful of th® trwct end confidence iopoeed in it, «nd wo ehell u»« all our fmergioe in m udralnietortne the lew that it ehall redound to the beet interest® of tho groat eat nu-ibop of the peapla of this country* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Charles S. Hamlin (1914, October 13). Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/speech_19141014_hamlin

@misc{wtfs_speech_19141014_hamlin,
  author = {Charles S. Hamlin},
  title = {Speech},
  year = {1914},
  month = {Oct},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/speech_19141014_hamlin},
  note = {Retrieved via When the Fed Speaks corpus}
}