The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-18
The Election Of Reserve Bank Di-
rcCtOrs.

An argument has already made lis
appearance In behalf of the unwar.
Snted regulations of the Federal r..
serve bank organization committee
governing the election of Glass A and
Class II directors of the Federal re-
serve bank organization committee
that the portions of the Federal Re.
serve act dealing with this subject are
clumsy, but they do not call for any
great amount Of official Interpretation.
much less misinterpretation.
The sole argument for the organi.
nation committees orders restricting
member banks from voting except on
group nominees Is based on the require
ment of the act that the member banks
IN every reserve district shall be III
v1ded into three groups according to
capitalization. Why. ii Is asked in de-
fence of the organization committees
rulings. was this grouping retained II
voting was not Ia be- restricted by II;
Tho answer is easy. There was no
good reason for retaining the grouping
provision when its original purpose was
abandoned.
The currency bill introduced into
Congress last June included scheme
br the election of reserve bank dlrec.
Srs which was consistent with the
Excessive rndicalism that obtained In
he early stages of the new currency
legislation. The bill as IL passed the
House made 10 substantial change IN
the clection plan, the object being
clearly Ia compel the election of a con
trolling majority Of the reserve bank
board which should hc representative
Of member banks having preponderant
numbers but only Il small percentage
OF the banking resources Of each re.
serve district.
In arriving at the meaning Of tho
election provisions of the act II read.
lily becomes apparent that the reten.
ton of the grouping requirements i
far less significant than the removal
OF the group restrictions on voting
which were stricken from the House
bill by the Senate. the House subsc-
Quency cOncurring in the elimination.
The deleted restrictions are:
"Every elector shall select
from among the names on the
list pertaining to hts group one
name for director Glass A. The
name receiving the greatest number Of
votes shall be designated
as Federal reserve director for the Droup
10 Uhtch he belongs. Directors OF Glass
shall be chosen in the same manner"
There is no ground in the law for the
rulings of the organization committee
that member bank may nominate for
its respcctirc group and that the
electors will vote only on the nominees
of their o,rn group" The theory Of i'm.
plication from the grouping require.
mcnts Of the act cannot hold for Il
moment against the deliberate Congress
siOnal elimination of group restrictions
on voting before the currency bill be-
came the Federal Reserve act.
That there was no very intelligent
purpose in retaining the grouping re-
quirement Is shown by the senseess
retention of the slIperfuous reserve
district electors. II was originally
intended that the list of these electors
should constitute the list of candidates
for Glass \ directors. ana this intent
was preserved in the hill which passed
the House of Representatives Never
theless when the senate changed the
meihod of nomination and permitted
the member banks 10 suggest candi-
dates FOR both CLASSES of directors, the
House cOncurring in the change. the
wholly uDnerssilry district reserve eec-
tor was retained for voting purposes.
IT there was any reason at all for
keeping the group classification Of
banks I'm the law il was Ia give them
M option 10 vOt" according 10 the
Strength of their class feeling. This
seems 10 l." suggested by the provisions
that the list Of nominees must indicate
by whom nominated" but the urgnn-
Zntiou committee has amended all that.
II has arrogaied Ia itself nn op Ion
which clearly belongs Ia the member
banks. IN option To choose for whom
they shall vote.
In the opinion Of rHr SrN the mem
her banks should give serious attention
70 the necessity uf defeating The ~
ganization committee Ia this matter.
what the member banks are entitled
Under the law 10 do Is 20 vote for any