The Washington herald., 1914-04-07
new BANK Plan
TO AID Farmers
Committee Hopes Scheme
Will Be Ready for Move
ment Of Crops.
MANY PROTESTS HEARD
New Orleans Says Selection of Re-
serve Cities Was Uniust-Presi-
dent Backs Up Organizers.

'
Federal Reserve Board Organization
Committee to begin the actual operation
OF the new currency system In time to
meet the demands of the crop-moving
period in the fall. II the member banks
subscribe at once to the capital stock OF
their reserve banks and select directors
soon. the committee believes II will be
possible for the reserve banks to be work.
ing smoothly before the strain of the
crop-moving season begins.
Secretary McAdoo and the other mem
bers OF the committee realize that the
crop-moving period will bring about the
first important test OF the strength of the
new system. They realize also that IL the
present tendencies In the business world
remain unchanged. the strain upon the
banking system will be much more severe
than it was last fall when the Treasury
Department. as an emergency step, found
IL advisable to loan nearly $O,OOo,OoO as an
aid to the crop movement
other Means Available.
The committee is aware that emergency
resources for the crop moving period will
be available either through the repetition
of last years crop loan or under the pro-
visions of the Aldrich-Vrecland act, which
has been extended until July. 1915. But
1t is the desire of the committee to dem
onstrate the ability of the new system
to meet the test Of the crop movement
without recourse to these emergency
measures.
President Wilson let II be known yes
terday that he had unqualified confidence
in the wisdom and fairness of the or
ganization committees decisions in desig-
mating the twelve Federal reserve cities.
This disclosure was accepted as final
evidence that the President does not in
tend to give any comfort to the dis
gruntled cities, not designated as reserve
centers, whose protests began to reach
the Treasury Department yesterday.
One OF these protests came from a
mass meeting held at New Orleans
Saturday. 1t was in the form of a
resolution which set forth that the
confidence of the people Of New Or
leans in the new currency system had
been rocked and rent to its very foun-
dation stone" by the evidences OF un-
fairness seen in the selection of re-
serve cities of which New Orleans was
not one.
Many Ignorant of Law.
Secretary of the Treasury McAdoo
took the position that the protest did
not merit comment by the organiza-
tion committee.
The committee is convinced from the |
interest taken in daily disclosures of
what the Federal reserve actually pro- |
vides, that a strong need exists for edu- |
cationaI work among bankers as well as |
other citizens of the country. Many \
evidences have reached committee o., a
widespread ignorance Of the terms OF
the law.
One OF these, which attracted the at |
tention of the committee. came from
Florida bankers. 1t was represented that |
the larger volume of business in Florida |
is done by shippers to New England and |
Eastern ports. It was claimed that the |
business men of Florida find it profitable |
to discount most of their paper in banks |
in these sections, instead of in the banks |
of their own State. Bankers feared that |
the new law would force them into do
ing business with the Atlanta reserve |
bank.
The Florida bankers are not deprived |
by the Federal reserve act Of the right
to discount through the New York and !
Connecticut banks, provided they keep !
the required amount of their capital on |
deposit with the Atlanta bank as reserve.
Occasion was taken to point out in this
however. that a competition
will be maintained between the different
reserve banks for the discounting busi-
ness of the various districts New York
may get tie business of the Florida ship
pers, but il will have to compete with
the Atlanta bank by furnishing a lower
discount rate.
May Make New District.
The trainers of the law believe that a
great benefit will be conferred upon the
bankers of the country by opening to
them the scheme of check clearances to
displace the present system OF check col
lections which banks outside OF clearing
house cities have to rely upon at present.
1t was learned yesterday that the only
section in which the organization COM
mittee believes exists a growing need for
an additional reserve city is the NOrtn-
west. The belief here is that soon a
movement will be in initiated in Congress
to permit the Federal Reserve Board to
thirteenth district