The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1913-07-17

authority on banking and currency
but also as a mar entitled
the respect of the AS COM
pared with the New York bankers,
for instance, he is in much better
repute with the general public. This
is why there must be interest in his
upon the proposed cur
rency legislation. as made this week
at the convention of the bankers of
Minnesota.
AT the outset, Mr.. Reynolds de-
his belief that the administra-
ton is thoroughly sincere in its de-
sire to secure the best possible cur
rency and banking system, and urg-
ed Thai bankers the country over co
operate to hat end.
In some particulars Mr.. Reynolds
believes the bill should be amended.
He criticises the reserve features of
the bill. making the federal reserve
banks repositories for these funds.
He declared this would shrink the
'loaning power of the banks, particul-
arly in the reserve and central re-
serve cities. For example, he states
that the balances of the corresponds
ents of his bank run to about $780,
900, 600 as an average. Allowing TO.
cash mean of 40 per cent, this allows
$50, 900 of these funds for loans.
Under the proposed system, these
funds would be deposited with the
federal reserve banks and the loan.
ing power of the private banks, es-
pecially in the %centers, would be re-
duced. He acknowledges that this
would be offset by the privileges of
rediscounting with the federal re-
serve banks, but maintains that this
would not offset the loss. If Mr.. Rev
nolds is right about this, the new
system would undoubtedly reduce
the credit available to the large cen
tiers of the country. However, one of
the objections raised against the pre-
sent system is that it c%entralizes a D
ital and credit more than it should
do, and the smaller places OF the
country will hardly object to the pro-
posed bill on this account.
The other principal objection made
by the Chicago banker was to the
nature of the federal reserve board,
to have supervision over all of the
federal reserve banks. He argues
that, with no Representatives. on this
board from the bankers holding the
. +" 49,
stock in the federal reserve banks.
With their members appointed by the
president and with three members of
the cabinet sitting on the board, it
would be uncomfortable that the mat
ter could be kept out Of politics.
" - . - A+- ~.
The Republican is inclined to be-
lieve that there is too much fear of
the bankers in the federal govern
ment, as a general rule, and this no
doubt is the reason why no provis-
ion was made to give them member
ships in the federal reserve board. 1t
is the same sort of suspicion that
prompts the government to require
collateral from the national banks
for deposits OF government funds.
Notwithstanding the government is
supervising these banks and pretends
10 Stanu sponsor over them when
they receive deposits from private in
dividuals. 1t is an obvious fact that
the country must do business through
the banks, and must rely upon the
integrity of their management.
Therefore, if that is unavoidably the
why deny them any voice at all
in the management OF the federal re.
serve banks with which their BUSH
ness is certain to be closely related?
There would be less danger of poll
tics. Further. there would be a small
err chance of those mistakes which
from ignorance. Why keep off
board the very class hat knows
the most about banking and cur