The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-11-17


land refused to lend Just when loans
wore most needed. Such an outcome
tainlN intolrrablc: 1t affects the bor-
rowing public and the industrial work.
man more than he banks: and 1t
would be useless stupidity to allow 1t
to continue.
Moreover. there arc other serious
defects to be cured. We have today
Il practical Capitalization OF credit.
because we ave had no organization
} OF credit. We find tina small hank or
tho small borrower, at tho mercy of
the big fellow who has the power of
great bank deposits under his control.
Much of thc talk about Wall street"
and the mono power is no doubt
exaggerated by those Win are largely
ignorant OF tho facts. Eut there is
apt TO he some fire whore there is SO
much u One does not need to he
Very discerning ia know that today.
in times OF pressure. certain persons
or institutions are favored 10 the neg
lect of others who have quite as good
heaval comes. the bank having large
resources. has its own troubles. of
course: but. AT the worst. il can pro-
trct itself by sacrificing some of its
customers. 1t is the small institution
that must so down On its Knees to seek
help. as Il favor. from those who
grant it. This is h situation which
eNcites so much irritation in the minds
of thinking business men. In other
words. exactly because OF our lack of
an organized banking and credit sys-
TEN. we have a situation in which, I'M
questionahlH. the strong more or less
dominate the weak; In which central
/ CONTROL nN,Ar rrn1ifC fc ~ y,rarttnn1 n NJ
and in which this central control. be-
ing unauthorized and irresponsible. is
difficult to locate and harness. Now
II then We hear opposition expressed
to a central bank; but. c%uriously
enough. we do not seem to realize
that We have today IL Capitalization OF
the most. effective kind. Because We
have no regulation of credit, We have
no liberty for the small borrower.
Therefore, what we must now strive
tor-as in all other great democratic
movements-is liberty under law, to
1.-THE end that all banks-large and
9small-shall he placed on IN essential
~ equal footing.
Political Control
There is Il general agreement among
bankers and experts that The establish
ment OF Il National Reserve ~associa-
ton would cure the foregoing evils.
The general principles on which it is
based are undoubtedly sound. 1t is
emphatically stated that it is not Il
central bank: 1t does not propose GEN.
tralization of Dur credit system. On
the contrary. it aims to create CO.
operation among all the banks. for the
common defense. 1t is a cooperative
agency. aiming mt a decentralization of
credit and the preservation Of the in
~dividuality of the small bank.
While there has been on the one
hand. a Very general acceptance by ex-
perts of the proposal for a National
on the other hand, there has arisen
from intelligent and public spirited
men a belief that the plan, good
enough in its purely banking and
credit analysis. has not sufficiently
protected the public from either %
selfish political control. or e, from
the domination of the so-called
money power"
So general is the acceptance of the
basic principles of a National Reserve
association that Ex-Governor folk has
put forth 4 plan identical with it, en-
cept that it substitutes a government
agency for the national board. 1t
provides that the governor of the in
stitution shall he appointed by the
president Of the United States, and he
removable by him at any time: that
fifteen of the ~twenty-onc directors of
the national board also be appointed
by the president. subject to the APP
prevail of the United States senate.
These suggestions of the distinguished
ex-governor Of Missouri are at vari-
ance with the principles on which
he bases his criticism of the National
Reserve association. He agrees with
all of us i'll holding that the control
of u credit system should he entirely |
free from political influence: and yet
taHA 81 1,r- T.
plan which you'd be certain to inject
the most effective political control.
Against his proposals we might fifty
quote his own words: Memory of the
last central bank that Andrew jack
son fought. Its corruption of members
of congress and attempted control of
the government will prevent this ex-
pertinent being tried again in this
country With this statement we are
all i'll hearty agreement; and it is
reason enough why we should not
make the officials or directors of the
National Reserve association political
a~ppointees. or a part 81 the spoils of
a national campaign.
Indeed, if YOU look closely at any
play which proposes to place in the
hands of the people" the control of
the technical and involved questions
of credit and banking. you will find 1t
only another way of contriving to
throw the problem into politics. None
tary and banking questions are too
complicated to be trusted to any other
than experts: we have no business to
settle them by a counting of noses:
and I may add. the business men Of
this country will throw themselves
solidly against any plan which i'll
wolves political control.
Financial Control
Quite recently J. ]. Hill expressed
La fear that. while the National Reserve
association would provide a much
needed reform, it was not sufficient
~ protected from control by the mon
ey power" Certainly no plan would
be accepted which was not so pro-
tectedi In that We can all agree.
How fully to protect the National Re-
serve association from ambitious fl
%nancial control is a point needing care
full and serious consideration.
In the plan OF a National Re-
serve association. as generally known. |
thrce-ffths Of the directors OF the
local association are to be chosen on
the principal OF one bank, one vote.
whether the bank is large or small, a |
tank having a capital of $4,000 count
ing as much in the result as one hav-
ins a capital of s25.000.000 The other
basis of capitalization, a bank casting
votes in proportion to its holdings in
tho National Reserve association. SO
far. the majority of power rests with |
the small banks. Independent Of the
size Of the capital.
The directors of the branches (com- +;
posed of local associations) are to be
similarly chosen. II there were twelve
associations. there would be twelve di-
rectors. one for each association. Then
eight directors two-thirds Of the
,wclve) would be elected by proxy. ,