Efforts to modify this system by a partial distribution of the public moneys among national banks had resulted, it was charged, in discrimination and favoritism in the treatment of different banks and of different sections of the country.
Sec.6.

#Inelasticity of credit#.

Our banks, considered both separately and collectively, were unable to increase their loaning powers quickly and easily to respond to business needs.

The need of greater elasticity of credit was felt in the more or less regular seasonal variations within the year, and in the more irregular variations in cycles of years from periods of prosperity to those of panic and depression in business.

The inelasticity was necessitated by illogical federal and state laws restricting absolutely the further extension of credit when the reserves fell below the percentage of deposits (15 or 25 per cent) fixed by law.