The Clarksburg telegram. [volume] (Clarksburg, W. Va.) 1874-1926, 1911-10-19

ISOLATION, must be made and kept
free forever from control by politics
on the one side and powerful COM
binations Of capital on the other. II
is doubtful If either could be done by
the method laid down in this plan.
The political connection is inherent
in the constitution Of the proposed
Reserve Association. Its governor
and two deputy governors are to be
appointed by the President of the
United States. These sit in the di-
rectory together with two members
of the cabinet and the Controller of
the Currency. No matter how large
rsinded these men may be, they are
all necessarily involved in the CON
duct OF party politics and obligated
to serve its ends so far as decency
permits. 1t would be foolish to be-
ieve that the tremendous opportunity
offered by strong internal influence
in such an organization would not
tempt most men and some admins
trations to an alliance disastrous
like to the government and the tinan-
ces of the country.
The advocates OF the plan say also
that it has been made Impossible for
any large financial interest to control
the Reserve Association. Let us ex-
anime this. OF the forty-fve directors,
twenty-seven are to be chosen, in one
'way or another, by the local associa-
lions. In these local bodies, three
afths of their directors are elected
by ballot by the banks, irrespective
of size, and two-tifths on the basis
of capitalization. 1t is plain, of course.
that combination Of few very
strong banks in any district would
represent capitalization great
enough to select these two-fifths. The
other three-fifths are open to the
same control. Each bank has a vote
and the limitation of capitalization
for membership is $4,000. For the
big banks of district, or any one Of
them, TO increase its capital stock By
a million dollars would be tribe
in these days OF large financial pro-
iects.
Such an addition, used to finance
new banks in small towns throughout
the district, would provide for forty,
if each were capitalized at $4,000.
The voting control of any district and
its choice of its own directorate and
of a director for the national associa-
ton could be controlled as easily as
the British House of Lords can be
lswamped by the creation of new
peers.
ITO eliminate this danger, the sys-
TEN of representation or voting power
in any form in proportion to capitali-
cation should be done away with;
the minimum capitalization emitting
4 bank to vote should be raised;
and suffrage in ain association should
b. also conditioned on absolute flnan-
clal independence, This implies a
zone bank. one vote" rnle in ali bal
iotings, and an effective illegal prohi-
'bition against combinations. Even
hese safeguards might not entirely
protect the central organization
gainst undesirable control. Certain
ly nothing short of them would.
In another specification the pro-
posed plan is innocent and confiding
beyond belief. 1t says, for instance.
that no member of any national or
state legislative body shall be di-
ector OF the Reserve Association, nor
of any local association" and its sup
porters point 10 this as sufficient
shield against political encroachoent
There is nothing in 1t to make Will
liam J, Bryan, Theodore Roosevelt,
or many Of the most active polite
ians OF the country ineligible for the
directorate. Perhaps the proposed
Reserve Association might be an eff
fectlve agent for currency reform;
but the plan of it does lot guard it
against capitalistic or political cap
ture."
Speaking of the farm. Mr.. Hill said
that the main fact about that indus
try us that it is producing today less
than one half of which it could be made
to produce, without material addi-
tional outlay of capital or labor"
THE average yield of wheat in the
United States for the five years end
ing in 1910 was eight-tenths of Il
bushel per acre more than in the five
years ending in 1905" he continued.
1t was less than four-tenths of
bushr1 moro than for tho ton nndiny