The Leon reporter. (Leon, Iowa) 1887-1930, 1914-01-08
THE SPIRIT OF WALL STREET.

The cleaElngS or the BANKS Oh New
York City are somewhat greater, day
by day, than those Of all the rest of
the nation beside. For the week
ending December 20, for example.
the New York banks cleared items
to the amount of $1,769, 600, 900
while the rest Of the country report
ed clearings of $1,549, 100000. This
is why the attitude Of the New York
banks toward the new currency Dill
is of such Importance.
What is that attitude?
Time will reveal: but We beg to
quote from an editorial which APP
pears in the current number OF that
Well-edited Wall street organ, The
Commercial and Financial Chronicle.
This article is nearly six columns
long. Five solid columns are devot-
ed to pessimistic prophecy that ma
tional banks will be very slow to come
in under the new law, backed by a
detailed analysis of certain provisions
of the Act. The contention OF the
Chronicle is simply that it will not
be profitable for the banks to JOIN
the proposed federal organization.
Then follow these words:
1--WE have gone thus at length into
the question of the inducements, or
the lack of inducements, existing for
the entrance into the system OF the
national banks because this deals
with practical and not with theoretl-
cal considerations, and because ad-
herence to the system on the part OF
the major portion of the national
banks is vital to it's success. If these
early obstacles can be satisfactorily
overcome, we are inclined to regard
the new system as likely to prove
highly beneficial. 1t has many excel
lent features and few Objectionable
ones, outside the makeup of the fed
eral reserve board, the permission to
banks outside the central reserve
cities to employ 25 per cent of their
capital and surplus or One-third OF
their time deposits in five-year farm
mortgages and the making OF the
federal reserve note issues obliga-
lions of the United States. Barring
such defects, the new system seems
we'll calculated to promote the inter-
est, the welfare and the prosperity
of the country's industrial activities.
We do not think the circumstances
that there are to be eight or ten fed
eral district banks will initiate
against the successful working of
the scheme; for through the opera
ton of the federal reserve board,
thew will in effect be under a single
control. If we suppose that ulti-
mately the state banking institutions
can also be prevailed upon to join
possibly a dream of Utopia-it may
be we'll that the United States will
have a better banking system than
that of any other country. Certain
~ no other can be pointed to where
all the different parts will be SO per-
fectly co-ordinated and yet be so
completely Independent, where thou
sands of separate units will each be
performing their several distinct
functions. For the present, however,
the practical considerations possibly
standing in the way of the successful
establishment Of the system over
shadow everything else.
The west is content to judge Wall
street out of it's own mouth. Ac-
.cOrding to it's most authorltve n
nancial publication the new banking
law is calculated to promote the in
terest, the welfare and the prosperity
of the country'S industrial activities;
the regional system will not initiate
against the successful working OF
the scheme; the United States may
we'll have, if the banks go into the
scheme, better banking system
than any other country-all the diff
ferent parts perfectly co-ordinated
yet completely Independent, and
thousands OF separate units perform
ing each their several distinct func-
lions. And-and--the esteemed
Chronicle regards it as very doubt
full whether the banks will go into it!
These are not words of caricature;
they are quoted. This is not what
some fire-breathing enemy of the
money power says about Wall street;
it is what Wall street says about it's
self. There is no hint in this very
well-written article that there might
be such thing as public duty in a
case like this. There is no glim-
mering perception that the word
ought might perhaps come home to
the consciousness of New York bank
ers, confronted by fair chance to
work out. on the basis of the present
law, the best banking system in the
world for the worlds formost indus
lTldi ana dSl al lIntlo1.
When the argument which the ar
ticle embodies is examined in detail
all the more lurid is the light
thrown upon the chilled steel selfish
ness of it's attitude. The bill per-
mits central reserve city banks-in
New York, Chicago and st. Louis--to
reduce reserves from % to 8 per
cent. The Chronicle deems it doubt
full whether the banks will care to ac-
cept this reduction. The bill requires
these central reserve banks to trans
fere per cent of their Is per cent
reserve to the regional reserve banks.
The Chronicle insinuates doubt
whether the per cent will be safe
in the regional banks! We quote
the remarkable passage in which this
hint is conveyed:
"The question, therefore, which
will come up for very prompt con-
sideration with the banks in the cen
trail reserve cities is whether they
will transfer the immense sums rep
by the per cent to the
i ,;.< be