Putting on the brakes in time of danger

The open market, in other words, would enable the federal reserve banks to put increased burdens upon the other banks of the country, just as the mechanism provided by the federal reserve act makes it possible for them to relieve those burdens at other times. Increasing the burdens of the other banks would thus be the federal reserve way of “putting on the brakes” in a period in which credit was being extended at a dangerous rate.