The discounting operations were originally intended to be the function of prime importance in the development of a banking system which should be the controlling factors in the banking and financial realm of the United States. One of the great defects of the Old National Banking System was that was in operation previous to Nov 4th 1913, was the lack of a good discount system. A great portion of the paper discounted at banks was very immobile. The most common credit instrument was the promissory note which was very local in character and could not be easily turned into cash. There was little sale for such paper outside the district where the borrower who had given his note lived. The banks therefore had to arrange their loans so that these notes would fall due at stated intervals. If in an emergency a bank needed more funds these notes could not be easily realized upon until their maturity. It is easy to see that under these circumstances banks would not want to invest in or buy promissory notes held by other banks, the nature of which they knew nothing about.