The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-08
REPORT GIVES PLAN
FOR RESERVE BANKS
Committee Favors Uniform Or.
CARNATIONS in the En-
tire System.
WOULD OPERATE AS UNIT

The board NJ directors Of the Federal
Reserve Bank Of New York selected
rooms AZ 81 Pine street yesterday a. tenn
porary quarters pending Organization OF
the hank Directors are now engaged
In going over plans for organization or
the New York bank on the lines OF re-
port made to the Federal Reserve Board
by special committee OF experts ap-
pointed for that purpose. Within the
next two or three weeks tho governors.
chairmen and vice-chairmen Of the boards
and possibly other directors will meet at
Washington to discuss the report. II will
then he presented by them to their respec-
tive boards for adoption or amendment
The special committee that drew up
this plan was appointed by tho Federal
reserve organization committee. which
has since gone out OF existence. II is
headed by H. Parker willis. recently APP
pointed secretary 60 the Federal Reserve
Board. who received approximately $4,000
from Congress for drafting the original
Federal reserve bhl OThcr members
are Edmund II. Fisher Deputy Comptrol-
Ter Of New York city: Andrew A. Benton,
O. Howard Wolfe. Joseph \. Broderick.
Ralph Dawson and stephen H. FRrnham
1t ~ understood that tho report will be
the basis on which the district banks
of the system viii largely he established
and operated. The committee has re-
ceived the advice Of leaders In various
departments Of banking. including Max
May. vice-president Of the Guaranty
Trust Company, one Of the leading au-
thorities on foreign exchange in the coun-
try Harry T. Ward and g. G. Robinson
Of the Irving National Bank and Ralph
Van Nochten Of the Continental and Com
mercial Bank Of Chicago.
The report advocates the adoption OF a
uniform system of organize ton by the
twelve regional banks as far as cond-
tons will permit The reserve act does
not prescribe details Of the separate bank
organization this being left to each bank
within the general provisions Of the law.
The committee In furthering the idea of
uniformity presents a tentative get OF by
laws for typical central reserve bank.
ono OF the most striking features OF
the report is the recommendation that
In the matter OF foreign exchange. which
the committee considers the second prin-
clpal element Of tho business Of the Fed
eral reserve bank the twelve reserve
banks should act as unit. II has been
maintained by the leading bankers Of New
York that the reserve system can b. the
power that II should he in the inter-
national markets only II IL is operated
~ unit The committee recommends
that In selecting agents and establishing
offices abroad the banks he required to
act Jointly. The services Of foreign eN-
change expert OF known ability should be
obtained TO direct foreign operations uf the
banks. 1t is deemed inadvisable shat the
banks should enter the foreign exchange
field as aggressive operators
The committee suggests that the Fed
eral Reserve Clearing House be estab
lshed NJ Washington II suggests that
each Federal reserve bank deposit with
abe Federal Reserve Clearing House all
It's gold beyond TINT which will be suni-
Client to take care Of local needs. Weekly
settlements are favored. Az Tangible
evidence - the ownership ~ the gold de.
posted with the clearing house IL IL pro
posed 20 issue certificates IN large de
nominations in a similar manner 10 that
I'm which clearing house currency ccrtid-
cater are now issued.
Domestic exchange business 81 the Fed
eral reserve system should hc ~ ar
ranged II IL suggested, as 10 ofIer CON
slant Inducements TO uOu-mtmbrrs 20
enter the system. I'll charges for col
lection should bc based on actual costs
and should not be- assessed against mem
her banks upon a basis ;hat would yield
n pront.
As Federal reserve banks will not
handle uenis on non-member banks there
does not appear to be any necessity FOR
a Federal reserve bank Joining the clear
ing house in the city I'm which II Is located.
Items on member banks which fall into
the hands ~ non-mcmbcr hanks can he
collected through the Clearing House ts
at present
II is recommended that all Federal re-
serve banks be opened simultaneously on
a uniform basis and that the Federal re-
serve banks he not opened until their
functions are ms nearly complete as pos
slble.
The committee recommends that the
general business Of each bank shall he
separated under divisions as follows
Bureau Of currency and coin; bureau OF
foreign exchange: bureau OF clearings
and domestic exchange bureau of ex-
animation and audit bureau Of reports
ANA statistics and bureau OF credit ana
discounts