Word: member
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Dates: during 1920-1929
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...Board felt that too much money was being absorbed by the stockmarket, that other interests were being forced to pay too much for money they borrow, that indus-try as a whole was suffering from diversion of funds to brokers and speculators. It therefore expressed the opinion that a member of the Federal Reserve Banking System is "not within its reasonable claims for rediscount facilities" when it borrows Federal Reserve money to be used in "making or maintaining speculative loans." Further, the board threatened to "restrain the use of Federal Reserve credit facilities in aid of the growth of speculative...
...Board is not the entire System. The twelve Federal Reserve banks and some 9.000 national and state banks that are members of the System have large and definite powers of their own. Stock in the 12 Federal Reserve banks belongs not to the government but to the member banks. Most of the money in the Federal Reserve banks belongs not to the U. S. but to the member banks. The essential theory of the Federal Reserve System is that the member banks in each district get together, pool their resources and form a virtually inexhaustible reserve fund upon which...
Refusal of Loans. It is therefore very debatable whether any Federal Reserve bank would or could refuse a loan to a member in good standing. Says W. Randolph Burgess, assistant Federal Reserve agent in New York writing of the Reserve System in 1927*: "A Reserve bank cannot tell from the nature of its loans what its money will be used for. . . . It is thus impossible for a Reserve bank to dictate how its credit shall be put to employment. . . . The specific use of credit is the business of the individual member and nonmember bank. . . . What the Reserve banks do primarily...
There remained also the possibility that the Reserve banks would either raise their rediscount rates or attempt to persuade member banks to call in New York call money...
...rediscount rate is the rate at which a Federal Reserve bank discounts loans to member banks...