The Development of Our Foreign Trade Under the Federal Reserve Act

• Date: 01 January 1916
• Author: John Clausen
• Published date: 01 January 1916
• DOI: 10.1177/000271621606300112
• Subject Matter: Articles

132

THE

DEVELOPMENT

OF

OUR

FOREIGN

TRADE

UNDER

THE

FEDERAL

RESERVE

ACT

BY

JOHN

CLAUSEN,

Manager,

Foreign

Department,

The

Crocker

National

Bank

of

San

Francisco.

The

Federal

Reserve

Act,

which

was

signed

by

the

President

on

December

23,

1913,

and

has

since

become

operative

by

the

open-

ing

on

November

16, 1914,

of

the

Federal

reserve

banks,

has

indeed

become

a

powerful

force

behind

the

business

machinery

of

our

country,

and

while

it

may

contain

possibilities

of

abuse

and

mis-

directed

efforts,

as

a

whole

it is

felt

that

banks

and

general

business

will

be

benefited

in

that

through

able

and

harmonious

action

on

the

part

of

our

financial

organizations,

we

will

be

in

a

position

to

more

adequately

meet

the

growing

demand

for

international

commerce,

and-if

our

expectations

come

true-prevent

our

periodical

panics

with

their

demoralizing

effect

and

cessation

of

business.

Of

all

the

experiences

of

panics,

bitter

and

costly

as

some

of

them

have

been,

perhaps

the

most

effective

was

the

proof

it

afforded

that

strength

and

safety

are

to

be

found

only

in

systematic

combina-

tion.

We,

in

common

with

other

enterprising

nations,

are

approach-

ing

the

condition

of

economic

maturity.

The

question

is

not

now

of

vital

importance

whether

twelve,

eight

or

only

one

reserve

banking

center

will

bring

about

the

desired

result,

whether

the

government

or

the

reserve

banks

should

effect

the

note

issue

and

thereby

provide

a

more

elastic

circulating

medium

to

better

meet

the

growing

demands

of

our

commerce,

and

it

should

therefore

be

the

unbiased

aim

of

all

member

banks

to

lend

their

every

support

to

the

new

institution

which,

no

doubt,

eventually

will

work

out

to

the

benefit

of

all

concerned.

It

is

necessary,

however,

for

the

enterprising

banker

and

busi-

ness

man

to

move

quickly

and

conform

with

new

conditions

in

reorganizing

former

systems

to

advantageously

cope

with

the

pres-

ent

possibilities

of

broader

and

better

banking.

There

are

many

reasons

why

the

country

banker,

particularly,

should

enter

upon

a

broader

field

of

operations.

Time

alone

will

prove

with

what

vigorous

efforts

the

larger

banks

throughout

the