(2) The difficulty of educating handlers of bills in distant places as to American credits.
(3) The lack of bill buyers in foreign countries who will quote as low rates on dollar as on sterling bills.
(4) The natural prejudice of bill buyers in foreign countries in favor of a bill of known currency and against a bill of as yet unknown currency.
(5) The lack of men trained to exercise the judgment and financial responsibility required of them as managers of branches or agencies which American banks might establish in foreign countries.
(6) The inferior communications for both goods and mail between the United States and foreign countries as compared with those between Great Britain and foreign countries.
Only time, experience, and patient effort will remove these handicaps to the elevation of dollar exchange to its proper position in international finance. The business, however, is developing and will continue to grow as our banking machinery and connections extend throughout the world.
The Act permits member banks to accept an amount of bills not exceeding 50 per cent. of their capital and surplus. By the amendment of March 3, 1915, under certain conditions they may be authorized by the Federal Reserve Board to accept up to 100 per cent. of the capital and surplus. The following banks in this district have received such authorization:
| Amount of capital and surplus. | |
| Bank of New York, New York | $6,000,000 |
| Mechanics & Metals National Bank, New York | 12,000,000 |
| Atlantic National Bank, New York | 1,600,000 |
| American Exchange National Bank, New York | 8,000,000 |
As this bank has probably been the largest single purchaser of bankers' acceptances, it has been able, as it gained experience, to exert some influence toward standardizing practice and form....
The amended regulation[307] issued September 7, 1915, considerably broadened the field of acceptances eligible for purchase and encouraged an increased volume of these instruments. The further amended regulation issued December 4, 1915, covering the purchase of bankers' acceptances arising out of domestic transactions relates to a class of bills which national banks are not authorized to accept. When accepted by institutions of high credit they have a ready market, though at a fractionally higher rate than acceptances based on foreign transactions.