The progress made in this field, in the various directions contemplated in the Federal Reserve Act, may be discussed under the following heads: member bank branches, reserve bank foreign operations, acceptances and dollar exchange, and gold movements.

At this writing1 several member banks have opened foreign branches. The National City Bank of New York City has, with the consent of the Reserve Board, established branches in the following places: Buenos Aires, Argentina; Habana, Cuba; Rio de Janeiro, Brazil; Valparaiso, Chile; Genoa, Italy; Petrogard, Russia. Moreover, subbranches have been established in connection with each of these main branches. The Commercial National Bank of Washington, D. C, has established branches at Panama City, Panama, and at Cristobal in the Canal Zone.

The foreign operations of the reserve banks, provided for in the act, have to do with the establishment of foreign agencies, etc., and the dealing in foreign bills and in bullion. Very little in this connection has, however, yet been accomplished. In the words of the Reserve Board:

While much has been done to facilitate the financing of foreign trade through the development of the acceptance market and by the establishment abroad of American banks and branches, ±e provisions of the act which permit the establishment of foreign agencies or branches of federal reserve banks have not as yet been availed of, nor have the banks as yet undertaken :he direct purchase of foreign commercial bills, or the perform-ince of other functions relating to foreign transactions author-zed in the law. This delay has been due partly to the disturbed condition of business in markets abroad and partly to the belief hat a sound and thorough application of the law in its domestic aspects should precede the undertaking of foreign operations allowed by the act. The Board has, however, had under consideration for some time the advisability of authorizing federal reserve banks to appoint correspondents, and to establish agencies in foreign countries, and on December 20 formally approved the application of the Federal Reserve Bank of New York for authority to establish an agency with the Bank of England. ... If the authority granted by the Board in this case shall result in the establishment of the agency, it will be so arranged that the other federal reserve banks will be enabled to participate in the agency relationship on the same terms and conditions.

Member bank branches

Reserve bank foreign operations

1 March, 1917.

It is probable that other connections of this character will be authorized from time to time as occasion requires, thus enabling the federal reserve banks, while assisting the development of our international trade, to provide for themselves, by holding a substantial amount of foreign paper, an effective means of absorbing any shock due to sudden withdrawals of gold for export. There seems to be no reason why the federal reserve banks should not be placed upon the same footing in this respect as the great reserve banks of Europe and given wide powers in the matter of international exchange, with the Federal Reserve Board acting as the central controlling force in the coordination and direction of operations.

On February 28, 1917, the Board announced that an agency similar to that established by the New York Reserve Bank at the Bank of England had also been authorized for the same reserve bank at the Bank of France. In like manner the San Francisco Reserve Bank has established an agency with the Philippine National Bank.