upon interest and discount rates has undoubtedly been to stabilize
and harmonize them. Not only has there been a narrower variation
of rates in different parts of the country than had been expected
but the system has on the whole held the rates down. During the war
this stability was partly due to wartime control. Subsequent to
the close of the war there was a rebound to much higher rates of
discount, but even these were probably by no means as high as they
would have been, had it not been for the existence of the system.
Relations to Foreign Financing (The Edge Act).—While the original Federal Reserve Act had provided for the organization of foreign branches by qualified national banks, only a few banks showed real interest in the branch plan and only one or two took up the formation of branches on a considerable scale. Hence the adoption of an amendatory Act which authorized national banks to unite for the formation of banks which should engage in foreign trade financing. A few such banks were organized, but here also the interest of the different institutions was soon found to be limited. One reason assigned for the hesitation of banks in organizing the new corporations was the fact that they might be compelled to give to competitors an undue amount of knowledge of their own transactions. While, therefore, a few foreign trade institutions were organized, usually under the laws of New York state, with stockholders (banks) scattered throughout the country, it was evident within a year or so that this attempt to provide for the financing of foreign trade had been unsuccessful. Only in South America and the Far East (and there as a result of the provisions of the original Federal Reserve Act authorizing the creation of branches) did the banking system of the United States gain a distinct foreign development. The lack of foreign financing mechanism was obscured during the war years because of the necessity to which many foreigners were subjected of keeping their balances in New York and generally in dealing with American banks regardless of the conditions established by the law. Immediately after the close of the war modifications of this state of things began, and it became apparent that as soon as Government financing of American export trade ceased it would be impossible to maintain exportation long on anything like the basis which had existed during the war. A measure recognizing the need for an organization for export banking was taken under advisement in the winter of 1918-9 and was eventually made law in Oct. 1919. Meanwhile many American enterprises had fallen into the habit of financing their own foreign trade by extending long credits to buyers, while borrowing heavily from their own banks on domestic account in order to get the funds they needed to carry on trade elsewhere. In this way between the date of the Armistice and the close of 1920 there had been built up a foreign unfunded balance representing the difference between American exports and American imports reliably estimated as high as $4,000,000,000. One outcome of this great export balance was seen in continuous and violent disturbances of rates of foreign exchange, sterling (which had a normal par of $4.86) being depressed as low as $3.25, while other currencies suffered similarly and in some cases to a greater degree. This condition of affairs gave an impetus to the idea of establishing upon a national scale “Edge Act” corporations under the legislation already referred to, and during the winter of 1920-1 an effort was made to bring about the investment of capital in such undertakings, their purposes being to facilitate the movement of American goods to foreign countries on long-term credit.
Conclusion.—The Federal Reserve System between its organization at the end of 1914 and the close of the year 1921 passed through a remarkable development which not only vastly increased its resources as compared with any figures they would have been likely to reach had it not been for the war, but also necessitated active participation on the part of reserve banks in many types of financial transactions from which they might otherwise have abstained. The results of this activity were both good and bad—good in increasing the activity of the system and in affording an opportunity to be of direct and material usefulness; bad in bringing about a mushroom growth which prevented or curtailed the development of methods and practices upon a scientific basis. The system as a whole, especially those features which were at first thought to be of doubtful practicability, had definitely found its place and established its effectiveness. There had been improvement in methods of business financing, in the type of commercial papers, and in the use of modern instruments in connexion with the conduct of foreign trade. There had also been a large advance in economy, promptness and effectiveness, in domestic exchange, and in the collection of cheques. Priceless service was rendered to the U.S. Treasury during the war and through it to the world at large, since without the aid of the Federal Reserve System the financing of the war would probably have been impossible. On the other hand, the Federal Reserve System was the instrument through which an inflation of credit and prices occurred in the United States. The post-war attempt to curtail such inflation was not begun at a sufficiently early date, but was steadily working during 1921.
Authorities.—Reports of Secretary of the Treasury and of the Federal Reserve Board, 1914-20 inclusive; Federal Reserve Bulletins, 1915-20 inclusive. (H. P. W.)
FEDERAL TRADE COMMISSION. This American Commission was created by Act of the U.S. Congress, approved Sept. 26 1914, for the prevention of unfair methods of competition in commerce. It is composed of five members appointed by the President, and confirmed by the Senate: not more than three members may be of the same political party. The Commission elects its own chairman. It entered upon its official duties March 16 1915. With it was merged the Bureau of Corporations, previously under the jurisdiction of the Department of Commerce.
If the Commission has reasons to believe that a “person, partnership or corporation” practises any unfair method to the prejudice of the public interest, it shall serve a notice upon such party, submit a statement of the charges, and set a date for a hearing. The party complained of has the right to appear and show cause why the Commission should not require the cessation of practices alleged to be in violation of the law. If the party refuses to obey the orders of the Commission, the Commission may apply to the U.S. Circuit Court of Appeals. Banks and common carriers are excepted, they being under other Federal supervision. The Commission is empowered to investigate from time to time “the organization, business, conduct, practices, and management” of any commercial corporation and its relation to any other corporation, and to make recommendations for a readjustment of its business alleged to be violating the anti-trust laws, including those relating to price discriminations, intercorporate stock-holdings, and interlocking directorates. The purpose of the Commission is to advise and regulate rather than to punish. It is also empowered to investigate trade conditions of foreign countries as affecting the foreign commerce of the United States, and to report to Congress with recommendations. The Commission comprises three departments: administrative; economic, in charge of investigations; and legal, for enforcing its findings.
FEJERVARY, GEZA, Freiherr von (1833-1914), Hungarian statesman and general, was born March 15 1833. He began his career in the army, and as a captain he won in 1859, for a heroic action on the hotly contested heights of San Martino in front of Solferino, the highest military decoration of the former monarchy, the cross of Maria Theresa. In 1872 he became State Secretary in the Hungarian Ministry of National Defence (Honved) and Minister of National Defence in 1884. In 1895 he persuaded the Emperor Francis Joseph to agree to the religious and political reforms of the Wekerle Ministry. In 1903 he resigned, together with the prime minister, Szell, owing to the rejection of a bill to increase the contingent of recruits, and was appointed captain of the Hungarian Life-Guards organized at that time. He was appointed premier June 18 1905. The parliamentary majority declared that the Fejervary Ministry was unconstitutional, and organized a national opposition against it. Fejervary nevertheless succeeded in settling these differences by the so-called Pactum, on the basis of which the Wekerle Ministry was formed April 8 1906. From this time onwards Fejervary's political activity ceased and he resumed his military career. On the death of Prince Esterházy, captain of the Hungarian Body-guard, Fejervary was appointed his successor. He died of cancer of the tongue April 25 1914. (E. v. W.)
FÉLIX, LIA (1830-1908), French actress (see 10.239). Her appearance in Sardou's La Haine in 1874 marked the end of her theatrical career. Inferior in talent to Rachel, she possessed a beauty which her more famous sister had not. She died in Paris on Jan. 15 1908.
FENWICK, ETHEL GORDON [Mrs. Bedford Fenwick] (1857-), British nurse, was born at Spynie House, Morayshire, Jan. 26 1857. She was educated privately, and in 1878 entered the Children's hospital at Nottingham to be trained as a nurse. After a short time at the Royal Infirmary, Manchester, she became a sister at the London hospital (1878-81), and in 1881 was appointed matron of St. Bartholomew's hospital. In 1887 she married Dr. Bedford Fenwick (b. 1855), the well-known gynaecologist, and henceforth devoted herself largely to the work of reorganizing and raising the status of the nursing profession. From 1889 to 1896 she was managing directress of the Gordon House Home hospital, and in 1887 founded the British
