Modernization Of The Credit Structure

The high quality of the bank and trade acceptance as commercial paper has induced the Federal Reserve Board to adopt and use it as a sort of special currency. The extension of government credit is effected on the basis of gold and the highest class commercial paper denominated as bank and trade acceptances. As gold is not present in sufficient quantity -dollar for dollar-to meet the tremendous sums of money required for the conduct of the nation's business, it becomes necessary, in order that the currency and credit of the country may be kept in a most liquid state, that some substitute measuring up to the qualities of gold itself, be used. The acceptance, as high class commercial paper possessing the qualities required by the Board, is, therefore, of great importance to the maintenance of an ideal credit system. The acceptance modernizes the country's credit structure, and it is for this purpose that bankers and business men should encourage their use in every way.

Liquidity Of The Nation's Resoures Made Possible By The Extension Of The Acceptance Method

The desire on the part of commercial and financial interests of the country, as well as the government itself, is towards maintaining the resources of the nation in a most liquid state. The present system of open book accounts, in this respect, is unwise, since it ties up tremendous amounts of capital and renders it unproductive of wealth.

Today, in the country's credit situation, there is a vast army of credit awaiting to be mobilized for the purpose of upbuilding our resources, but so long as we keep it in the form of book accounts, it is being unnecessarily chained, fettered and useless, from being utilized to the greatest extent. The releasing of the tremendous sums of money which otherwise lie dormant and unproductive would do more towards mobilizing the national resources than any other means of credit extension. In other words, the general adoption of the acceptance and its application to the credit system of the country would increase the business capital of the nation.

Advantages To The Buyer, Seller And Banker, Equally Advantageous To The National Interest

It is equally true that the advantages which flow from the wider use of the acceptance in this country, benefiting alike the buyer, the seller, the banker and the consumer, are equally advantageous to the nation's welfare.

The Acceptance As A Factor In National Preparedness

At the present time, with the continuous call for efficiency methods, and the general adoption of those plans through which the aims of the government for utilizing the entire national resources to the fullest extent may be made possible, the more systematic operation of credit and its extension should be equally the aim of the entire business world. The national interest demands that the maximum of efficiency be introduced. Public interest is best subserved by better and more conservative business methods, by the elimination of wasteful methods of conducting business, and by improved trade relations and harmony among the commercial and financial world.

Welfare Of Nation Linked With Its Credit System

Credit is the life blood of business. The welfare of the nation demands that the credit system should at all times be at the height of efficiency. The development of sounder credit methods is not only important and urgent, but indispensable. Therefore, any methods having as their goal the bettering of business methods should receive the whole-hearted cooperation of the banker, the business man and the nation.

The Acceptance In The Field Of Commercial Credit

The acceptance method is of great importance to the national interest. To the soundness of the nation's financial system, it is necessary that commercial credit be kept in such a condition of fluidity and usability that to the fullest possible extent it will serve as an unshakeable foundation for all times.

Bank Acceptances

Their History, Practical Uses, Operation under the Federal Reserve Act, Advantages, Eligibility, Discounts, Markets, Discount Corporations, Dollar Credits, Investments, etc., etc.