December 1, 1914.] 



THE INDIA RUBBER WORLD 



117 



Published on the 1st of each Month by 



THE INDIA RUBBER PUBLISHING GO. 



No. 25 West 45th Street, New York. 

 CABLE ADDRESS: IRWORLD, NEW YORK. 



HENRY C. PEARSON, Editor 



Vol. 51. 



DECEMBER I, 1914. 



No. 3 



Suiscirr.oNs: $3.00 per year, $1.75 for six months, postpaid, for the 

 WJ"'" , and „ dependencies and Mexico. To tSe Dominion 

 & ^poslpaV" ° ,her """*""• $3 ' 50 <° r «•*— *SS*5 



Adveetisinc: Rate, will be made known on application. 



Remittances: Should always be made by bank draft or Postcffice or 

 Express money order on New York/payable to The India Rue.™ 

 Publishing CWany. Remittances for foreign subscriptions should 

 be sent by International Postal Order, payable as above 



DiicoNT.NUANCEs: Yearly orders for subscriptions and advertising «re 

 regarded as permanent, and after the first twelve months they will 

 be discontinued only at the request of the subscriber or advertiTer 

 Bills are rendered promptly at the beginning of each period and 

 thereby our patrons have due notice of continuance 



COPYRIGHT, 1914, BY THE INDIA RUBBER PUBLISHING CO 

 Entered at the New York postoffice as mail matter of the second class. 



TABLE OF CONTENTS ON LAST PAGE OF READING. 



THE NEW FEDERAL RESERVE BANKING SYSTEM. 



""IIK Federal Reserve banking system which, after 

 many months of preparatory work, was put into 

 operation November 16, marks the greatest change in 

 our financial methods since the establishment of the Na- 

 tional bank system over fifty years ago. Briefly, this new 

 banking scheme will substitute commercial credits in the 

 place of government bonds as a basis for bank issues. The 

 old system now being displace! was exceedingly inelastic; 

 under it there was too little currency when it was most 

 needed and too much when it was not necessary. It is 

 confidently believed by financiers generally that the new- 

 method will prove a remedy for this condition. When 

 business is active the new reserve notes will be issued 

 against sound commercial credits, and when business ac- 

 tivity subsides and credit is no longer needed in the same 

 volume, these bank notes will be deposited in the bank 

 and retired. 



It is believed that under this new system of banking 

 the annual stringency caused by the necessity of funds for 

 moving the western crops will he avoided and. better than 



that, that the panics which have recurred from time to 

 time, and which have played such havoc with American 

 business, will be averted. 



The new system will not provide funds for building 

 operations, for enlargement and equipment of fact- 

 but will .imply be supplied to those who are handling 

 commodities which can easily and immediately be con- 

 verted into cash. 



One feature of the new Reserve Hank system which will 

 be of particular interest to those engaged in foreign 

 trade is that part of the act which permit, national bank- 

 to deal in foreign acceptances. For instance, if an Amer- 

 ican manufacturer wants to purchase material in a foreign 

 country he arranges with a bank engaged in interna- 

 tional operations to draw the necessary funds. The bank 

 then stamps this draft "Accepted," thereupon becoming 

 responsible for its payment. This acceptance, conse- 

 quently, is good in any part of the world where the bank- 

 has credit. And. vice versa, if a foreigner wishes to pur- 

 chase American goods he applies to the international 

 bank in his city for a similar acceptance. This significant 

 expansion of the financial operations of our banks, to- 

 gether with the establishment of branches of leading 

 North American banks in South American cities, must 

 greatly facilitate commerce between these two con- 

 tinents. No longer will there be any excuse for carrying 

 on trade between North and South America by the cir- 

 cuitous and expensive European route. 



ENGLAND'S RUBBER EMBARGO. 



"'HAT there is a substratum of uneasiness on the 

 part of American manufacturers because of the 

 embargo is evident. Their visits to Washin 

 and letters and telegrams to the State Department prove 

 it. Yet there is a decided vein of optimism evident also. 

 That England intends to stop rubber from going to Ger- 

 main or Austria they believe. That a stoppage of ship- 

 ments to the United States would help goes without sav- 

 ing. Perhaps, and probably, a bit later shipments could 

 be resumed under such guarantees as would convince 

 England that the United States was to be the ultimate 

 destination. Again, with the Suez canal threatened, Eng- 

 land may wish to stock up while she can. If the war 

 goes on she and France will need lots of rubber for tires, 

 ground sheets, etc. A big stock of rubber in London or 

 Liverpool is only a common sense safeguard. Once accu- 

 mulated, shipments to the United States would undoubt- 

 edly be resumed. 



