New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-06-21
CR|T|C|SE
CURRENCY MEASURE
Claim That Government Control
Might Enable Politicians to
Dominate the Reserves.
CALL SALARIES TOO SMALL
Say Pay Would Not Tempt
Leading Financiers-National
Banks Might Give Up
Federal Charters.

Banks Might Give Up
Federal Charters.
Although commencing the first draft OF
the Owen-Glass currency reform bill In
many essentials New York bankers yes
terday did not hesitate to crtticise Sc
verely the political aspect of the measure
! in delesating practically unlimited powers
10 the federal authorities over the ma
tional banking system. Much disappoint-
ment was expressed at the eleventh-hour
| change in reducing the number OF mem
bers in the Federal Reserve Board TO
seven. only one Of whom Is to be a
banker. This. II was freely pointed out
might easily give 10 INSCRIPTIONS polltl-
clans the right 20 control bank reserves
which I'm reality are owned by deposltors'
! one Of the serious consequences result
| ing from the passage Of the bill In Its
present form might be the refusal OF the
| national banks to join the regional re-
| serve associations by relinquishing their
| federal charters to apply for a state char
ter for state banks are not required TO
become members Of the reserve associa-
| tons.
Another feature OF the bill which was
the subject Of unfavorable comment was
the small remuneration allowed 10 mem
/ bers OF the Federal Reserve Board. a
! salary Of only $4,000 a year. II was SAID
was not sufficiently large TO induce men
OF known probity and banking ability 20
accent such position were IT offered. IL
was polnted out that it would be far bet
ter 10 make membership on the board
honorary. following the custom Of the
Rank Of England IN choosing It's gov
ernors as men who would not serve on
! the hoard al the stated yearly stipend
might be willing to do so gratis through
desire TO serve the best interests OF
their country.
Views Of Leading Bankers.
The Tribune made a thorough canvass
Of the prominent banks In the hnancia'
district yesterday and presents herewith
| the views Of the heads OF several OF the
| largest institutions.
otto T. Barnard. president Of the New
| York Trust Company:
"The fundamental provisions Of the OH
seem 10 be sound and in accord with tn"
| best discussions. There are features
which ought to be amended. and which
Derbaps will be- The organization 81 a
national federal reserve board has been
changed In the last sketch Of the bill, 30
that It's constitution IS almost entirely
political. and il would seem unwise 10
attach the banking system OF this coun-
| try so closely TO the prevailing admins
trauon. whatever It might be.
| ut might be n temptation for a polu-
cal board in fixing rates OF interest and
| exercising other details Of SIS authority
| 10 study the voter rather than the best
interests OF the banking community. /
am pleased, on tho whole, however, that
! the framework and starting point are ms
good as they are
| Willard V. King. president of the CO.
lumbia- Knickerbockcr Trust Company;
illustrating the possible misuse OF the
political aspect Of tho bill take the man
ner I'm which the notes Of Southern banks
with cotton az collateral might affect IN
fairly the reserves in other banks. As
every ono knows. the Southern farmer
considers cotton as king and he thinks
he IS entitled to highey price for the
commodity than the buyer In Now Eng
land or any other part OF the country IS
sometimes willing to pay. As a result
the cotton accumuates. and the reserves
Of the Southern banks become depleted
by loans secured by the cotton.
Noting this condition, why would Il
not be possible for the Southern banks
TO use such political influence as they
may possess IN drawing upon the reserves
Of the regional banks in New England.
and thus unduly retard tho wheels ~
commerce in that section? I think, on
the whole, however, the bin is "A step I'm
the right direction The idea Of govern
ment control IS the old Democratic doc
trine. But every nation that has tried It
has found II 10 fail and finally abandoned
it,"
Against Government Control.
J.. G. Kaufman. president OF the Chat
ham-PheniY National Bank:
AS president OF the Michigan State
Bankers Association advocated feder-
allied clearing houses. and this is sub
stantlally accomplished by this bill. I
do not approve Of the government going
into the banking business. Currency
based on assets would be more desirable
than the present bill. | believe that men
familiar with the business Of their own
section should be on the boards OF the
regional federal reserve banks"
| William A. Nash. chairman OF the board
Of the Corn Exchange Bank and a former
| president of the New York Clearing
! House Association:
81 believe that the bin az a whole is
| probably the best that has been sug-
! Rested so far for reforming the currency
system. II certainly has excellent feat
! ures. but the scheme Is too elaborate for
| any one TO digest II without more careful
| study than ] have had time To devote
| TO II. one feature which viii probably
| come in for a good deal Of discussion is
| the political character Of the Federal Re-
! serve Board. Concerning the wisdom Of
| that provision ] am I'm doubt. Whether
| the bankers will be willing TO have the
| whole board composed Of men selected by
| the President, except the three govern
ment officers, ! cannot say.
"The salary of $4,000 a year would be
| inadequate 10 command the best ability
| # the directors devoted their whole time
and their best energies 10 the work of
the board II a man is big enough and
broad enough TO take such position. he