The Birmingham age-herald., 1912-12-01
Big Banks Forced to Invest Country Bank Reserves
 on Stock Exchange
CREDIT PYRAMID
 BUILT ON GOLD
Thirteen Banks Located in New York and Chicago Hold One Fourth of All the Cash
 in Banks
By GEORGE NJ. REYNOLDS, President of the Continental and Com- mercinI National Bank of Chicago.


 Thirteen banks in New York and Chi rago carried in their vauls at recent Hate $330, ,O0O, ,OOO in cash-$s0, 100000 in ahree Chicago banks and $250, 100000 in ten New York banks.
 All the rest of the 25,O00 banks in the Gountry carried only a little more than s1, ,000, ,ooo,O0O. These 1S great banks, in other words, hold one-fourth of the banking reserves of the nation.
 The concentration of cash in the east @rn financial center is even more strik- ing. The banks of New York normally carry in their vaults $500, ,Ooo.O00 cash reserves This is one-third of all the money in the banks of the whole coun- try. It is one-seventh of all the money in the country-in the banks, in public freasuries, and in the hands of the people,
 This huge pile up of cash in the great banks of the financial centres gives rise to the popular belief of the existence of a money trust" Many good Americans believe that few banks, with thls great store of cash in their vaults, have secretly joined to- Rether to monopolize the credit of the country, to say who may and who may not have credit, and what they shall pay for it. I believe I would know if there were such a monopoly of credit, because the bank with which I am connected is the largest bank in the country outside of New York and is one of the 13 banks holding a fourth of all the money in the 25,00Q banks.
 Our Banking Power Centralized
 No such money trust" exists, but 1 want to say most emphatically that the American people are doing all they can, through antiquated banking laws, to promote such monopoly We have no central bank in the United States, but we have a greater centralization of banking power than have European countries where the central bank sys tenn is highly developed. The popular fear of the growth of money trust is the result of a contradiction of banking power in the large cities, which is bound to become greater and greater under our present banking sys- tenn
 The growth of large banks and the building up of banking communities of Interest" has been more pronounced since the panic of 907. The great banks of New York in the fall of that year. despite their command over the liquid funds of the country, were unable to prevent money panic in a time of peace and prosperity.
 It was this painful realization of the defenselessness of our banks, when un- der fire that accelerated the movement toward powerful banking coalitions. The several groups of big banks con trolling institutions in various parts of the country, through stock owner ship, or interlocking directorates, have been greatly strengthened in the past four years, not because of any design to form money trust" but to the end that the banks could protect them selves in future panics.
 System Favors Stock Speculation
 Our banking system now tends to de- velop money trust" If is not the fault of the banks, but of the system. Our system forces the reserve funds of the banks into a few large banks In the cen tral reserve cities; and it then forces