The Washington times., 1913-06-28
MAKEUP OF THE FEDERAL RESERVE
BOARD.

President Wilson has every right to be pleased
with the reception which the banking feaures Of
the currency BILL as distinct from the administra-
tive have been given in financial and business circles
Endorsement of them las been strictly nonpartsan
1t is very generally conceded that a much better
substitute than the Aldrich plan has been found for
our present currency system. Subject to amend
ment in minor details, it is probably good sub
sttute as we can hope now to see evolved.
But this general Endorsement, exactly because il
is nonpartisan both politically and from the stand
point of the supposed antagonism between the busi-
ness public and private banking interests, lends
added weight to objections to single features of the
bill that are just as unanimously opposed. If the
Endorsement is sincere and well advised the criti-
csm must be accepted as the same. And scarcely
banker or business man or thoughtful newspaper
fails to qualify support of the bill in general with
dsapprobaton Of. the radical nature of the Gov
ernment's control feature even while recognizing
the soundness of that principle.
The argument that governmental control of the
great central banks of continental Europe has given
birth such abuses as are prophesied as possible
under the system here is nonpertinent. In Europe
the control is governmental in the broadest sense
of that word, nonpolitical and exercised only in
pursuit of permanent public policy Under the
Wilson Tor Bryan plan, the control of our system
wpald be vested, not ip the nation, but political
Administration that changes once every four years.
0f the seven members Of ahe Federal Reserve
Board three would hold office ex offico through
their occupation of political positions, and, there
fore, change with each Administration. All but one
short of a majority of ,the board would be on it
essentially because of their political faith. 1t is only
the bare majority of the board that has any appear
ance of permanency, secured through the eght-year
term and retirement in rotation.
But.of these four members two would pass out
in each Administration; giving single President
the appointve power to total of FIVE places-and
in view of possible resignations perhaps to more
out of the entire seven This is not Government
control 1t is Administration control pure and simple
Three of the board, the ex offcio members, being
political appointees, would come and 60 with the
Administration. And though reappointment of the
eightyear members might generally be expected i'll
is scarcely probable that after the lapse of few
years this. would be feasible in more than one case
in two. In other words, an actual majority of the
Federal Reserve Board would probably be made up
at all times of men to such position. In view
of the enormous power to be vested in this board
through its control of discounts, The Times submits
that this is not safe proposition.
The stockholders of no national or State bank
or trust company would assent to similar sweeping
and periodic changes in its directorate. The bill
purports to regard the people of the United States
as stockholders in our national banking and cur
rency system. And yet it proposes for that system
such plan of control as would place not only the
great private monetary interests upon whose conf
dence our credit system must rely but the pub
Tic stockholders interests at the mercy of transient
political administrations acting through, perhaps, un-
tried men.