The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-04
The Financial Gerry

The Financial Gcrrymandcr.
Conceding that problem Of some
difficulty was set by the regional bank
scheme provided for in the Federal re-
serve act. II Is hard to see how the
committee composed Of the Comptroller
Of the Currency. JOHN SHELTON WILL
JAMS. and Secretaries MCApoo and
llOusroN of the Treasury Department
and the Department of Agriculture
could have made a poorer attempt at a
solution. In their efforts to please as
many persons and interests and as
many parts Of the country as possible.
instead Of regarding strictly the obvi.
Gus necessities Of the new banking sys-
ten. 1t Is likely that they have sue
ceeded in causing the possible maxi
mum of dissatisfaction. What reasons
Of expediency, prejudice or favoritism
prevailed in making the banking map
which the committee has drawn are of
course only conjectural. but the map
makers have done nothing to facilitate
the establishment Of the new banking
financial organization under hopeful
auspices.
Some Of the designations NJ reserve
cities are preposterous. To the whole
western half Of the country much more
than half In fact. only one Federal re-
serve city. San Francisco. is assigned.
Meanwhile absolutely unnecessary re.
serve cities are created at Richmond
and Atlanta. and Atlanta Is not even
reserve city in the present national
banking system. 1t is manifest that
the committee made the mistake OF pro-
yiding for reserve districts up 10 the
statutory limit of twelve in order to
accommodate cities where due regard
to the convenience and customary
course OF business" the instructions of
Congress for the apportionment could
not imaginably call for Federal reserve
banks at all
1t is no longer the New York banking
community alone which can he accused
Of feeling of resentment against the
fashion of political approaches 10 finan.
cial matters in the last year. II we are
not greatly mistaken, the Federal Re
serve Board has had an additional task
set in the countrywide jealouses and
hostilities which the organization com
mittee has provoked. There are certain
main banking centres in the United
States, and II the committee had seen
tit to contine its recognition 10 these il $
work could hardly have failed to he
to bring in cities which not only had
no better claim TO recognition than
others which were ignored. but had
indeed an Inferior title, the outcome
was bound to he discomfort.
No more convincing illustration of The
grOtesque processes which controlled
the committee Is afforded than by the
absurdity Of its close adherence to State
boundaries. The apportionment was
expressly excepted by the Federal re
serve act from the limitations of State
lines. but there has been altogether too
strict a following of geographical divi-
siOns. New York State is allowed to
remain tributary 10 New York city. but
the New York district shows with what
little reason the Uommiitee's lahors
were enlightened, Jersey city and
IIohoken, though having half dozen
banks and trust companies which are
identified with tn" New York Clearing
House Association, are Gu, away from
the New York region. with which they
would naturally be- associated. aud
~, 4
ark. which does I'M enormous banking
business with New York city. There is
something 81 indecent about such II dis
trict delimitalion as to make the whole
organization map OF the Federal reserve
system look like n monstrous Joke.
Under the circumstances II Is fortu
rate that the lahors Of the organization
committee are only tentative Anything
which the committee does can be un.
done by the Federal Reserve Board,
and II remains now for President WILL
son to make confidence commanding an
pOintnents to the board and so redeem
the new banking system from the mis-
takes with which it's inauguration Is
being beset 10y the organization com.
mtt.e.
II is fortunate also that the scheme
of the Federal reserve system is work.
able despite some handicap imposed 10y
setting up too many regional banks.
TIE weaker ones ar" bound To b"conle
in effect branches Of the stronger nsti.
,utionS but even n workable pnu can
10 i,,n Al u hu Il,
ger Of the moment Is thai the manner
Of III" organization committees por-
formanco of its duties will lead forth.
WIN to supplementary legislation in.