The Birmingham age-herald., 1914-01-07

ing system. 1t is recalled that in the year
which passed after the national banking
act which was enacted by Congress in
President Lincoln's administration only a
few of the the old banks and not many
plieation for membership. although the
temptations were great to take out char
ters as national banks.
However there was in that case no
gentle compulsion or, in fact, compulsion
of any kind. Under the new banking
law only two months are allowed for a de-
cision whether or not the national bank
will enter the new system. There will
be delay about sending application TO
Washington until President Wilson has
nominated the members of the federal re-
serve board and until the Senate has
taken action upon these nominations.
There is a tacit understanding, not due
to any agreement or anything like con-
ference, that it will be the better part
for national banks to wait until it can be
known who will constitute the great CEN
trail authority over the new banking sys-
tenn.
There are very few bankers in New
York, and the understanding here is not
many in other parts of the country, who
are now disposed strongly to criticise the
measure. 1t is regarded on the whole as
a very good measure not only by expert
authorities. but also by business men who
are constantly brought into touch with
the mechanism and apparatus by which
credit is utilized for business purposes.
1t has been a common remark that the
crux of the situation today is the char
acter and ability of the men who will
become members of the federal reserve
board. In many of the essential fea-
lures with which This central authority is
constituted there is now discovered to be.
strong resemblance to the fundamental
principle upon which justification for the
organization of a central reserve bank
was placed by the national monetary com
mission. The new federal reserve board
win have practically all of the authority
which a central reserve bank will possess
and some additional powers.
Bankers say that they will be able with
out much friction to readjust the ma
tional banks to the new national banking
system. Much of the work of the adjust
ment must be done by bankers them
selves. The federal reserve Board may
set the machinery in motion, but the
American bankers must watch the ma
chinery, carefully observing the working
of every part and contributing by their
experience and ability to the smooth op-
GRAFTON of this gigantic machine.
The Federal Reserve Board
Bankers say that the federal reserve
board is to be one of the greatest of the
political departments of the federal gov
ernment. They do not mean by this state
ment that the board will be influenced by
any partisan politics. Their meaning is
similar to that which lay behind the
statement which John Sherman made 4
few weeks after he retired from the treas
ury department in 1881. Mr.. Sherman said
that one of the chief responsibilities of
a secretary of the treasury arose from
the fact that the treasury department
from the point of view of politics. not par
tisan, but national, was more important
than any of the other departments of
the government. Efficient administra-
ton of that department. Mr.. Sherman
said. compels careful watching of public
sentiment throughout the country respect
ing fiscal and financial matters.
Under the new regime the treasury de-