Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1912-01-19

k0CIo O1HJO0 41Ie,1oOS 0s1s9e1s1 e 9SSess H08
how, under the tirst. tho bankinlI 10
sonrces sTe now centralized ju Wall
street pecau1e 1t 10 the only absolutely
Ause call loan market IN tho country,
pointing cut later bow the National
heses ve association uecontrali8 9 this
one financial ceuter into Is, the lack
of cooperation necessitatink zach Of
the rs, 00U Independents hanks in tue
country calling on their correspondents
for their reserves, guarding them
cloaaly, thereby Increasing the strin-
eency; and the bank note curi ENC, . the
only form that can expand or contract,
which now =. depends not on the de.
manGls of tho cOuntry's business but
the price Ut United Stares bonda
Then, beginning hia plea for the
National Reserve association, he told
how it was mcdelled after the
cnuntry g governmental form: recalled
to his hearers the fears held by the
smaller states when tho formation Of
the Union was planned asked them II
these same states had not benefited
rather than been injured, in spite OF
their fears.
'"rnere is no more to be fearen from
the organization OF the National Re.
serve association than the national
government, he said. 1T is not the
larger but the smaller states that y i'll
derive the greatest bepetits
Briefly he sketched the details Of its
formation, from the Independent bank
as the units, representing the cities in
the lotal associations, representing
g. <hovn Sn<@ F%SntrSNfa a.
presenting states, and finally the ma
tlOnal association, representing the
f-d+ral government. He shower how
the stockholding interests IN the. ma
lional association are always IN the
minority, having only two hfths re.
presentation on the boards of directors
of the local associations; one third Of
the district; boards, and only nine OF
tine 46 members of the national board.
40 get control of the national asso-
ciation, financial or political power
must control eight OF the Is districts. -
be ealu ''Ttat means that New York
and New England, for example, where
there are three districts, would have
tO 90. to the rest of tue country and
get control OF i've moro. By our last
amendment we. have absolutely pre-
vented the possibility Of any hnanc,ai
interest owing chain Of hanks gain.
lug control, for we have stipulated
that. where any individual, corpora
tion or other organization owns the
capital stock of two or more banks,
these banks shall not vote % separate
units, but Al one bank. 4.E
There 10 still further safeguard
the powers ot the reserve association
are closely limited, 90 much, that If a
financial or political power. did get
control, 1t would DO it nO GOOD. The
government and the member banks are
the only despositors; no individual or
corporation may deposit. or obtain
loans from It. 80 In no sense is il Z
central bank. It 10 just what lts name
says, an association. ~ a. "a
What would J. r. Morgan or any
other Wall street broker want Of an
ASSOCIATION that could not loan money
lon stocks or bonds, but only on com.
morcial paper which n not to ru1
longer than four months under apJ
|circumstanos and generally not morl
than ~ dayA $50 +:
..rbis pian 10 stha iirst 70 givs diree
= i'd to tho 1eg gitimate commercial mi
y ~ -