Evening star., 1914-08-11

| of commodities. the methods now in use
| for the financing of commerce and III
! duStry. the movements of cash from one
| part Of the country to another and the
| prospect of future notifications in the
| present trade channels. Besides these
| factors it was necessary to plan the dis
| tricts with the idea in mind that each re-
| serve bank must have a subscribed cap
| ital of at least St.n%1Stl with which to
| begin operations. Moreover. as each dis
| trict was to be made as self-dependent
| as possible. the amount and methods of
| borrowing between the different sections
| of the country had to be taken into
| account.
| Soon after the passage of the law the
committee began its consideration of the
| oro EN-.
Not Influenced by and made
Political Considera tions. no,nos,,,sn, . an
| of the principles by which it would be
| guided in its division of the country into
banking districts. In the determination
| of boundaries of the banking regions they
stated that they would first consider
seogra phical convenience. involving trans
portation facilities; second. industrial and
| commercial development and needs of
each section. and. third the established
custom and trend of business. as de-
veloped by the present system of reserves
and checking accounts. In advance they
warned all advocates that political con-
siderations will not be permitted to in
fuence the committee in determining
these important questions This state
ment of position was issued December 36,
1913
The committee was empowered by Con-
greSS to take testimony and summon wit
nesses to aid in gathering the material
necessary for making their decisions.
They began series of public hearings
in order to give the representative bus-
ness men of the various sections of the
country chance to express their views.
The first hearing was held in New York
city. January !. 1914. In all. the COM
mittee held eighteen public hearings In
the largest cities from the Atlantic to the
Pacific and from the great lakes to the
gulf A voluminous amount of testimony
was gathered in this way.
BY way of Supplementing the material
brought together through the hearings,
the controller of the currency made a poll
of the choices of the national banks for
reserve cities. The opinion of the bankers
finally reached by the committee. More
than 300 cities. through their clearing
house associations. chambers of COM
merce and leading business men. were
obtained by an Independent card ballot
addressed to each of the 1.411 national
banks throughout the country which had
formally assented to the provision of the
federal reserve act.
The committee divided the country into
twelve banking regions. According to the
terms of the law. they might have Sc
ected any number between a minimum of
eight and maximum of twelve. That
they determined upon the maximum num-
ber probably was very wise. The settle
ment of the whole matter at the outset
was the surest way to avoid trouble In
the end. Had fewer reserve cities been
chosen than the number allowed by the
act, it is certain the disappointed cities
would have continued to press their
claims and to agitate for the establish
ment of further districts.
x
In their testimony before the Senate
| the act was
Bankers Demanded pending in Con-
Minimum Number. g. =. me .se JAIN jam
| try were almost unanimous in the de-
! mand that the fewest possible number OF
| reserve banks be established. Neverthe-
| less, the. bankers probably will be heart
| lily in agreement with the committees
action of deciding for the maximum num-
| Der allowed by law.
BY this action. bankers will not have
| to fear that business may be on the con-
tinual verge of reorganization There
remains no apparent reason, with the
! establishment of twelve districts, for a
| redistricting for many years to come
| On the other hand. periodical addition
nf np licfv iNtc 1,,txI
| a rearrangement of boundaries and a re-
! ordering of banking practice. would not
| only have left a mass of work and worry
| for the future. but would have injected
| a certain amount of feeling of insecurity
/ into business.
| There tremendous amount of
! competition among the larger cities for
the honor of having themselves desig-
! mated as federal reserve cities Thirty
seven cities asked to be chosen. The
| committee could select only twelve
| therefore twenty-five cities were disap
! pointed by its decisions. The cities
| chosen to serve as federal reserve cities
| are Boston. New York. Philadelphia,
! cleveland, Richmond Atlanta. Chicago,
-. LOUIS Minneapolis. Kansas City, Mo-.
Dallas and San Francisco.
| Most question of the committees deci-
| slons was made upon its failure to desiR-
4 nate New Orleans. Baltimore, Omaha and
| Denver as federal reserve cities Espec-
| tally. had it been taken for granted that
New orleans would be the federal reserve
| city or a large southern district The
| surprise that this city had been passed
| over was very general
| Among the disappointed cities are Gin
cinnati. Columbus. Pittsburgh. Wheeling
/ Washinptop Ga