The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-12-01
NO CENTRAL BANK
IN UNITED STATES
But There Is Greater Centraliza-
ton of Power Than Have Eu-
ropean Countries-Thirteen
Financial Institutions in
Country Hold Fourth
of All Bank Cash.
BY GEORGE NJ. REYNOLDS.
Presideat of the Continental and Com
nserciaI National Bank Of Chtcaeo.

Chicago carried In tHeir 'ooiiS
recent date s3300Oo.00O in casn--$eo'
900. 600 in three Chicago banks ana
$3.50. 100000 in ten New York banks
All the rest OF the 25,eeo banks In
the country carried only little more
than $1,000. 600. 900 These thirteen
great banks. in other words, hold one
fourth OF the banking reserves OF the
nation.
The concentration OF cash in the
Eastern financial centre Is even mere
striking. The banks of New york
normally carry in their vaults $5oo.ooo.-
coo cash reserves This is one-thitu
Of all the money in the banks OF the
whole country 1t is one-seVentn OIL
all the money IN the country-in tne
banks. In public treasures and In the
han5s of the people.
This huge piling UP of cash IN the
great banks OF the hnanctaI centres
gives rise TO the popular belief OF the
existence Of a Money Trust" Many
good Americans believe that Few
banks, with this great store or casn
in their vaults. have secretly Joined
together to nonopolize the creoit Oh
the. country. to say who may and wno
NAV not have credit. and what they
shall pay for il. / believe ! wouid
know II there were such mcnopoiy
OF credit. because the bank with which
am connected is the largest bank IN
the country outside of New York, an"
IL one CT the thirteen banks holoins
n fourth of ali the money in the ss'-
0oc banks.
Our Danking Power Centralixed-
No such Money Trust exists, put
! want to say most emphaticaliy tnat
the American people are doing al! sney
can. through Anticipated banking laws
70 promote such q monopoly We nave
no central bank in the United States.
but we have greater CONTAMINATION
Of banking power than nave Europeans
countries. where the central bank sys-
tenn is highly developed. The popular
fear of the growth of a Money Trust
is the result of centralization OF
banking power in the large cities.
" hich Is bound to become greater anu
greater under our present banking
system.
The growth of large banks and the
building up of banking communities
Of interest has been more pronounced
since the panic Of 1907. The sreat
banks of New York in the fail of that
LIQUID funds OF the country, We're I'M
able TO prevent a money panic In =
time of peace and prosperity
II was this painful realization of the
Inconsistencies of our banks. when IN
der FIRE. that accelerated the move
.reat toward powerful banking coali-
tons. The several groups OF big banks
controlling institutions in various parts
of the country. through stock owner
ship. or interlocking directorates. nave
been greatly strengthened in the past
four Years. not because of any design
TO form A Money Trust" but to thu
end that the banks could protect thesn-
selves In future panics.
system Favors stock Speculation.
our banking system now tends to
devotion a Money Trust II Is not the
fault OF the banks. but OF the SYSTEM
our system forces the reserve FUNDS
Of the banks into few large banks
in the central reserve cities. and IL
then forces these reserve hof1inS
banks to invest their resources large
~ IN loans on stock exchange coila-
teral instead OF in commercial us
counts The captains Of finance. en-
Eased in the iiotation Of new ventures
ar, bank customers as borrowers on
The securities which these f0t&tions
hiring into the market The system,
therefore. which forces the reserve
to,dine banks to seek stock exchanges
IONS In preference to comneTcial
loans. directly benefits the e4Stains
Of anance who are populSrly supposed
10 l.. members Of the ellesei Money
Trust
S,.cuiators and Other borrowers on
stocks and bonds ia the lowest rates
20 loans in TITS country. Business
rnen pav higher rates fo- loans IN this
country B-'ssncss men pay higher
rates u Errope. where they have
scientific banking systems. the lower
rates are Vst- D. business meE- the
higne- by specu asors.
T-e tix banks - the fnauciai cen
.-rs. holding hundreds - millions OF
~.e.-res fo- thousands = smaller
backs asu-f kces these reserves l.qasd.
st.f Isl 81 sacn shape tlat they nay
d.. ra-ve~tlof. into cash 40 a moments
rrtt.s. e. meet TIE demands q the
s..,,..fffrx han.s fcr funds. The De
r,rr. cannot invest the bulk % their
-...u--cs In commercial discounts. a.
in b.. European practice. because Ne
lave 20 bsoas. u4uid market IN tnis
..-.rf.. for -.ra discounts The oniy
,ts rasid loar market Is the SOCK
.~.-,-rr. Aid % TIE banks must.
tsthr- they like 10 or not foster
uiation g. the expense 20 opfi~
uess
Crrdis PyrsBis Bsnt 90 t-eis.
our bank reserve system ~ faulty
All rsanev fysaz ~ hsnk vaults IL fcis
meme, \ hank. ths.~fore. keeps 40
more money on hand than u ner1s -
frsu-. is abnsty % meet Tie exrects1
sernanas q its depcsitoTs for c@sh-
The large the proportion q mens1 -
1ccDtlnn.-f en- S~roua InEcJ