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G IVIN G

wo

Reasons

tem through the medium of
this institution.

It is the strongest
Financial System
in the world.

The First National
Bank
MADISON, ILLINOIS

P^W rE M B E lT,s^
FEDERAL RESERVE
SYSTEM ^dl




FIFTY-TWO
REASONS
WHY YOU SHOULD SUPPORT
A BANK THAT IS A
MEMBER OF

The
Federal Reserve System

TRUTH a dFACTS
n
BY

Officials and Bankers
of National Reputation



TRUTH

AND

FACTS

MUTUAL INTEREST
interest and ours alike are served
by our membership in the Federal Re­
serve System. It insures our being able to
meet all proper demands of depositors and
borrowers.
*
*
*
*
GOLD RESERVE
W O Billion, Two Hundred and Fifty
Million Dollars in Gold—Eighteen hun­
dred million dollars in gold is held by the
Federal Reserve Banks as the reserve of
the banks which are the members of the
Federal Reserve System.
This bank, as a member of the system,
shares in the protection afforded by this
great reserve. As our customer you also
share in this benefit.
*
*
*
*
CURRENCY PANIC
n p HE Federal Reserve Banks keep on
hand such an immense supply of cur­
rency available at all times promptly and
without red tape to its member banks for
the payroll and other needs of their de­
positors that currency panics may be
eliminated in future.
*

*

*

*

BUSINESS PROTECTED
/T 'H E business of our community is pro­
tected by the ability of this bank to redis­
count its holdings of commercial paper when
necessary with the Federal Reserve Bank.
Our customers share in the protection
afforded by this great financial umbrella.




TRUTH

AND

FACTS

ENCOURAGES STA B ILITY
Q O N F ID E N C E in the Federal Reserve
Banking System played an important
part in the recovery of business from the
adverse conditions following the outbreak
of the European war, and is still helping to
keep business on an even keel.
*

*

*

*

NEW BANK NOTES
TJTAVE you seen the new bank notes of
the Federal Reserve Bank? They come
in denominations of $5, $10, $20, $50, $100.
They are the best bank notes this country
ever had. W e will be glad to show them
to you if you call.
*

*

*

*

SIMPLE AND PRACTICAL
rJ 'H E Federal Reserve Banking System is
a simple and practical means of making
the nation’s credit liquid at all times.
As a member of that system, this bank
is as independent of local conditions as it
is humanly possible to make it.
*

*

*

*

AN IM PORTAN T PRIVILEGE

W HT is
A

rediscounting? The most
important privilege obtained by our
membership in the Federal Reserve System
is that of rediscounting. This means that
when necessary, we can take our customers’
notes and drafts which we hold to the
Federal Reserve Bank and obtain cash in
exchange.




TRUTH

AND

FACTS

FINANCIAL PREPAREDNESS
'J 'H E United States began when the Fed­
eral Reserve System was organized. It
will be complete when every citizen is
doing his share by depositing with member
banks.
*

*

*

*

MAKING IT EASY
T T IS taking out the ruts and sandy spots,
the gullies and the steep hills which used
to slow us up and jar us. You can get
on this good road and enjoy all its benefits
by becoming one of our depositors.
*
*
*
*
GOVERNMENT ASSURANCE
'T 'H E U. S. Government is a partner in
the Federal Reserve System. Doesn’t
the Government’s deposit in this system
assure you of its safety?
*
*
*
*
VALUE OF SYSTEM
'T 'H I S co-operation greatly increases the
value of the system to us and our com­
munity. Are you linked up with this new
national system as one of our depositors?
*

*

*

*

LIQUID ASSETS
/ ” \UR policy has always been to keep the
assets of our institution thoroughly
liquid. Our membership in the Federal
Reserve System accomplishes this aim to
a degree previously impossible. In the
Federal Reserve Bank we have an unfailing
reservoir of cash obtainable in exchange
Digitizedfor FRASER
for commercial paper which we hold.


TRUTH

AND

FACTS

GIVES ASSURANCE
O E C U R E As Never Before — W e have
^ been in business for many years but at no
time have we felt so secure against sudden
calamity as since becoming members of the
Federal Reserve System. It gives us assur­
ance that we can realize upon a substantial
portion of our assets at any time.
*
*
*
*
TRANSFER OF FUNDS
r P ELEGRAPHIC Transfers— T h r o u g h
our membership in the Federal Reserve
System, we are enabled to have telegraphic
transfers of funds made to any part of
the country at lowest cost.
*
*
*
*
PRINCIPLES RECOGNIZED
''iP H E banking methods of today are based
upon the principles recognized and ap­
plied in the operation of the Federal Re­
serve System. You owe it to yourself to
transact your banking business with a bank
which is a member of this system.
*
*
*
*
CO-OPERATION
r P H E U. S. Government co-operates with
the thousands of member banks in main­
taining the Federal Reserve Banking Sys­
tem for the protection of the business
interests of the country.
*

*

*

*

A HUGE RESERVOIR
r P H E system is like a huge reservoir of
gold and currency with direct connec­
tions to all its
 member banks.


TRUTH

AND

PACTS

TRADE ACCEPTANCE
/~\NE of the more advantageous methods
of borrowing encouraged by the Federal
Reserve Banking System is the trade ac­
ceptance. W e would like to tell you about
this if you will call.
*

*

*

*

JOIN TH E CIRCLE
'C 'V E R Y one who deposits money with us
oecomes connected with this service at
once.
*

*

*

*

COLLECTION OF CHECKS
or not you are one of our
oepositors stop in and let us tell you
something about the collection of checks;
it is interesting.
*

*

*

*

PROTECTION AFFORDED
n pH E S E vast resources are available to
the members to enable them to serve
and protect the industrial, commercial and
agricultural interests of the country.
*

*

*

*

MASSED RESERVE
bank you choose should be able in
case of need to draw upon the massed
reserves of the nation.
W e are enabled to do so by rediscounting
with the Federal Reserve Bank and are
thus in a position thoroughly to safeguard
the interests
 of our customers.


TRUTH

AND

FACTS

PRACTICAL SYSTEM
'T 'H E Federal Reserve Banking System
is not merely an emergency system for
occasional use, it is an every-day banking
system.
♦

*

*

*

DEPOSIT W IT H US
T F YOU want to top this system of which
we are members, your connection can be
made by depositing your money with us.
*

*

*

*

FREE INSURANCE
TNSURANCE Without Cost — After the
currency panic of 1907, with all the losses
it entailed, what would you have been will­
ing to pay for insurance against another
such disastrous experience?
Today, through our membership in the
Federal Reserve Banking System, we are
able to offer it to you without any cost
whatever.
*

*

*

*

SAFE AND SOUND
'C 'V E R Y saving depositor is interested in
the Federal Reserve Bank, because it
makes the banking business of the country
safer and sounder than ever before.
*
*
*
+
BI-M ONTHLY STATEMENTS
A LL member banks of the Federal Reserve System in addition to regular
examinations by national and state bank
examiners are required to furnish a state­
ment twice a month to show that proper
reserves have been maintained.




TRUTH

AND

PACTS

PROTECT YOUR MONEY
can give your support to this great
uovernment enterprise and obtain its
protection for your money by becoming
one of our depositors.
*

*

*

*

NO DEPRESSION
1~")Q YOU remember the shut-downs, the
business depression and lack of employment which followed the currency panic
of 1907?
*

*

*

*

FINANCIAL PREPAREDNESS
'C 'lN A N C IA L preparedness in the United
States really began eight years ago when
the Federal Reserve System was organized.
It will be complete when every citizen is
doing his share towards the maintenance of
the system.
♦
*
*
*
MEANS ECONOMY
C E V E N T E E N T h ou sa n d B an k s—
Through the Federal Reserve System
we can collect checks on seventeen thou­
sand banks at par and in the shortest
possible time.
This is important to you as a depositor
as it means economy and early returns.
♦
*
*
*
PLENTY OF CURRENCY
r P HE
help
provide
effect a

system was created primarily to
the business men and farmers; to
plenty of currency at all times; to
steadier supply of credit.




TRUTH

AND

FACTS

MERITS OF A BANK
r P H E Merits of a Bank — When you
choose your bank you expect:
Safety for your deposits.
Certainty of accommodation.
Courteous and efficient handling of your
banking transactions.
*

*

*

*

MERITS YOUR SUPPORT
'T 'H E system merits the support of ail
good citizens, it must have yours in
order to reach its full development.
*

*

*

*

OFFERS YOU PROTECTION
O Y DEPOSITING your money with us
you receive the protection and new
facilities which the system enables us to
offer you.
*

*

*

*

HELPS BUSINESS
TJTAVE you ever driven over one of our
new state or country roads? What the
new roads have done for the driving and
auto trade, the Federal Reserve is doing for
the financial side of business.
. *
*
*
*
GOVERNMENT CO-OPERATION
n p HE United States Government co­
operates with the 9668 member banks in
maintaining the Federal Reserve Banking
System for the protection of the business
interests of the country. Through the
Federal Reserve Board in Washington it
supervises the twelve Federal Reserve
Banks.




TRUTH

AND

FACTS

SAVE TIM E AND MONEY
A S A member of the Federal Reserve
System we are enabled to transfer funds
to any part of the United States without
delay and at lowest possible cost.
*
*
*
*
LIKE A STRONG CABLE
'J 'H E Federal Reserve System is a great
cable, each strand may be weak, but
when combined can sustain the weight of a
Brooklyn Bridge.
*

*

*

*

SAFER BANKING
'C 'V E R Y saving depositor is interested in
the new Federal Reserve Banking
System, established by the United States
Government, of which we are a member,
because it makes the banking business of
the country safer and sounder than ever
before.
*
*
*
*
SAFEGUARDS YOUR INTERESTS
\ X 7 E SAFEGUARD our depositors’ in­
terests by carrying among our assets
a large amount of commercial paper which
we can at any time convert into cash by
rediscounting with the Federal Reserve
Bank.
*
*
*
*
HONEST MANAGEMENT
'T 'H E S E frequent examinations and re­
ports assure you careful and honest
management.




TRUTH

AND

FACTS

YOU BENEFIT
'^ ^ ''H E T H E R you are a large or small
depositor, have a checking or saving
account, we give you the benefit of this
most modern banking service.
*

*

*

*

FIVE BILLION DOLLARS
Jp'IVE Billion Dollars In Fund—If you
would like to have this nation-wide
fund back of you, let us write or talk with
you about it.
*

*

*

*

PROTECTS BANKING
P R O V I D I N G Banking Protection — The
vast resources of the Federal Reserve
System, now over a thousand million dol­
lars, are contributed by the depositors in
banks which, like ourselves, are members
of this great system.
*

*

*

*

BE CONVINCED
J F YOU are not convinced that the Fed­
eral Reserve offers you every degree of
safety and service required by good bank­
ing, come in and tell us what you want.
*

*

*

*

SAFETY ALW AYS
Q A F E T Y A LW A YS is a good motto for
a bank. W e make it ours by our mem­
bership in the Federal Reserve System with
the privilege of obtaining advances of cash
upon our commercial paper at any time.




EXCESS EARNINGS
r P HE Federal Reserve Bank cannot pay
more than 6 per cent on their capital
stock. All excess earnings go to the Government after certain reserves are created.
*
*
*
*
PREVENTS PANICS
n p HE Federal Reserve System makes it
practically impossible for another of
those currency panics which in the past have
caused business depression periodically.
*
*
*
*
BANK W ITH MEMBER
V O U can assist in perfecting our nation’s
banking organization by carrying your
account with a bank which is a member
of the Federal Reserve System.




TRUTH

AND

GIVES ABSOLUTE

FACTS

PROTECTION

Panic Likely to Affect All Banks in Locality
at Same Time

'J 'H E R E is no question but that a deposit
in an equally sound financial institution
is safer, if that institution belongs to the
Federal Reserve System than if it is out­
side of the system. This enhanced safety
is based on the central reserve to which
a member bank can turn in case of an
unexpected emergency. A soundly admin­
istered bank is in no danger of being
obliged to close its doors in normal times.
But in case industrial depression, public
distrust and panic conditions develop a
member bank can turn to its Federal Re­
serve Bank and instantly receive assistance
up to the limit of its holdings of eligible
paper, while a non-member bank is de­
pendent at such times on the good-will and
ability to help of other banks or banking
associations which may or may not be in a
position to come to its assistance even if
they so desire. For a panic is likely to
affect all the banks in the same locality
at the same time, and, under the common
pressure, no bank may be strong enough
to do more than meet the demands of its
own depositors. At such times the Federal
Reserve, as its very name implies, becomes
a safeguard of all fundamentally sound
members of the system. If many or all
the member banks in a district are in need
of accommodation at the same time and



TRUTH

AND

FACTS

if as a result the pressure on the resources
of the Federal Reserve Bank of that dis­
trict is temporarily too great it can call
upon the Federal Reserve Banks of other
districts which will discount or purchase
some of its paper and thus help it tide
over the difficulty. Membership on the
part of a deposit bank in the Federal Re­
serve System, therefore, affords practically
absolute protection to depositors against
loss occasioned by circumstances beyond
the bank's control.
Against unsafe practices by a bank, mem­
bership in the Federal Reserve System is,
of course, no absolute guarantee. The great
majority of member banks are national
banks and are regularly examined by ex­
aminers connected with the Office of the
Comptroller of the Currency who is an ex­
officio member of the Federal Reserve
Board. Non-national member banks, that
is State banks or trust companies, are not
under the supervision of the Comptroller
but may be examined at any time by the
Federal Reserve Bank of which they are
stockholders on its own initiative or at the
request of the Federal Board which is also
authorized to examine any member bank
through its own representatives (Sec. 9,
p. 5). Such examinations have actually
been made in not a few cases. A copy of
the Federal Reserve Act is enclosed in
which the sections relating to examinations
are underlined. The Board may and fre­
quently does accept the results of examina­
tions made
 by State examiners, but the


TRUTH

AND

FACTS

fact that a bank is subject to a Federal
examination unquestionably contributes to
the depositor’s security. Furthermore, ex­
aminations by Federal officials are as a
rule more thorough than those by officials
of at least some of the States.
To sum up, membership by a bank in
the Federal Reserve System protects its
depositors in times of panic or depression
by affording them the support of a cen­
tralized reserve, and safeguards them
against mismanagement by making the
bank subject at any time to examination
by a Federal official.
*

*

*

*

SUBSTANTIAL BENEFITS
'J 'H E R E can be no question of the fact
that without the existence of the Federal
Reserve System, the banking business of
this country would have been in a very
woeful state during the last two or three
years. Therefore, the depositors of all
banks (non-member as well as member)
have derived very substantial benefits from
the system; benefits so substantial that it
seems to us that every depositor in a state
bank, eligible for membership in the sys­
tem, should be interested in knowing why
his bank has not become a member unless
it has done so.
The fact that depositors generally have
not a clear idea of the difference between
a member and a non-member, and the ad­
vantage of dealing with a member bank, is



TRUTH

AND

FACTS

due very largely to the fact that, owing to
the peculiar circumstances under which the
Federal Reserve System has developed so
far, many member banks have been willing
to pass over to non-member banks nearly
all, if not all, of the benefits which they
themselves derive from membership. In
this situation, two things are possible.
First, the time may come when there will
not be a sufficient volume of benefits to
give everybody all that he wants. In such
case the benefits of the system would be
very much more rigorously restricted to
members than they are now or have been
in the past.
And, second, the time may come when
member banks generally will realize that
they are doing rather a foolish thing to
carry the entire burden themselves and
divide the profits with others who are not
carrying it.
If the time ever comes when eligible
non-member banks are cut off from the
benefits of the Federal Reserve System to
the extent that it is perfectly practicable
for the member banks to cut them off, it
would take the average business man a
very short time indeed to realize and ap­
preciate the difference between dealing with
a member and a non-member.
*
*
*
*
CLOSER SUPERVISION
'T 'H E R E is a closer supervision exercised
over the affairs of these banks which are
members than was possible before the
Member
Digitized establishment of the system.
for FRASER


TRUTH

AND

FACTS

banks are now required to render to the
Federal Reserve Banks, at stated intervals,
comprehensive reports covering certain
essential phases of their activities, and
these reports are minutely analyzed and
digested and the results laid before the
executive officers of the Reserve institu­
tions for their consideration. In addition,
close co-operation is maintained with the
examining forces of the State and National
Banking authorities which, with the inde­
pendent powers of examination granted to
the Federal Reserve Banks when necessary,
makes for a very thorough knowledge of
the member bank’s affairs and policies.
The natural effect of such knowledge
would be an effort by the bank to so con­
duct its business as to avoid criticism on
account of statutory irregularities or ques­
tionable administrative or credit policies.
This should in no sense be misconstrued.
The great majority of our member banks
have not found it necessary to alter their
previous policy in this respect upon the
assumption of their membership, while it is
equally true that the same high standard
may readily be found in a large proportion
of non-member institutions.
Again, it may be possible that the ele­
ment of service is entitled to some con­
sideration in this connection. The ability
to obtain prompt shipment of currency or
coin in any quantity or denomination de­
sired, and the readiness of the Federal




TRUTH

AND

FACTS

Reserve Banks to make equally prompt
transfers of funds together with the pres­
ent and contemplated enlargement of the
check collecting facilities of the system,
all offer a more or less indirect appeal to
the potential depositor.
Yet it remains a fact that the elements
of safety and service cannot be considered
either as surely resulting from the member­
ship of a bank in the Federal Reserve
System, or solely an attribute of member
banks alone. As a matter of fact, the bank
depositor is influenced by factors other than
those of safety and service. Local condi­
tions, personal acquaintance, and personal
preference have material weight and must
be taken into consideration.
♦

*

*

*

GREATER POSSIBILITIES
J F, AS one banker says, “ there are 500
accounts opened in this town every day,
and it is safe to say that not a solitary
account is opened with any one of the
banks because of its being a member of
the Federal Reserve System, the fact of
whether they are members or not has no
bearing of where they open their account.”
My reply would be that the banks in that
town are not awake to their duty in im­
pressing on the public the greater possi­
bilities as to banking with members of
the Federal Reserve System.




TRUTH

AND

FACTS

No properly managed bank can fail by
reason of a run or shortage of currency.
The discount privileges make it possible
for the industries of the locality to be
taken care of.
The transfer of funds through the Gold
Settlement Fund does away with the tight
money in crop moving times. It is possible
that the money of a locality may be left
in the locality by reason of membership.
There are a great many strong and wellmanaged banks outside of the system today
that would be entirely helpless if the
system were not in existence.