The Birmingham age-herald., 1914-10-12
Benjamin Strong, IT,, Will Win Fame as Governor Of
 Big Reserve Bank
OTHER LEADERS ARE
 FORGING TO FRONT
The New Federal Reserve Board Will in Reality Perform All the Duties of a Gen.
 tral Bank
By HOLLAND

ny HOLLAND
 New York, October 11.-tSpecial With
 the election of Benjamin Strong, Jr as governor of the federal reserve bank for
 the district identified by the name of
 New York, there should be put in place
 within a Short time the keystone of the
 federal reserve system. MT. Strong will
 be in a position somewhat similar to that held by the director of the branch bank
 of the United States when that institution
 was serving both the government and the people in the early days of American growth. For, although the United States
 bank as central institution was located | at Philadelphia, nevertheless the branch institution in New York was the part of | the machinery of the organization which
 was relied upon by Nicholas Riddle, pres
 ident of the Bank of the United States,
 for the working of the system.
 1 With the organization of the federal
 reserve bank in this city followed as it 1 is to be by the organization of the banks
 in all reserve districts, the people will
 have opportunity, due in part to the exi- gencies occasioned by the European war,
 Of learning within a few months how val
 uable factor-in American progress this new banking system is to be.
 | If in other federal reserve districts as | fortunate a selection as that of Mir Strong | for governor of the federal reserve bank 1 of this district be made, then the one 1 qualification for the success of the early working of the system will have been se- 1 cured During the discussions in Con gress and in banking houses in the larger 1 financial centers when the present law l was before Congress it was commonly
 said that after all the human equation 1 contained the factor upon which immedi- | ate and even permanent success of the l system depended. At first, this discus 1 sion was centered upon the membership of the federal reserve board
 l Those in Washington who were att l tempting to perfect the measure and 1 those who are of authority in the banking world knew that the federal reserve board was to constitute in effect cen I tral bank. Owing to the opposition in 1 many parts of the country to the estab- | lishment of central bank as the basis l of new national banking system, it l was found necessary to accomplish much | or all that a central bank can do in an 1 indirectmanner. This was done through l the creation of federal reserve board. | This board will embody in effect although 1 not in name, the powers and responsi-
 
 been organized a year ago it would have 1 been able greatly to facilitate the Amer 1 ican bankers who, acting as unit, were l attempting to unravel the tangled skeins of international finance which were caused 1 by the outbreak of the war in Europe. 1 Under the authority of the federal re- l serve board, there could have been speedy l mobilization of resources n<d almost l instant concentration of credit wherever l these facilities were needed.
 l The federal reserve bank in the New York district, as well as those which will
 be established in the other reserve dis 1 tricts, will bear the same relation to the 1 federal reserve board at Washington which the branch banks bore to the old Bank of the United States. Allowance 1 should be made however, for new and entirely different conditions especially in l international trade and finance, from 1 those which characterized the days when l the United States bank operated under charter of Congress.
 A Strong Object Lesson
 Not the least important and instruc- l tive of the object lessons which will be | taught by the operation of the federal re-
 serve board and the federal reserve bank ] will be this: The credit and money re- | sources of the nation will be reflected by l the operations of the federal reserve banks in the large financial centers. and prin- l cipally in New York. The laws of trade and the economic laws upon which sound finance stands make it inevitable that there be one financial and commercial clearing house in the United States And the operation of the new national banking system is expected to show that this con l centration at New York may be estab- lished without in any way impairing tho credit and resources which are necessary for carrying on the nations industrial and commercial life in other parts of the | country The European war disclosed in- | stantly not only the financial strength, | but also the financial responsibility of 1 New York, and there is now beginning to
 be understanding of the fact that this strength was utilized and this responsi- bility fully met without in anyway enrich | ing the bankers of New York who h0ve been influential in protecting the financial
 situation and industrial situation through
 out the country.
 A Sense of Duty
 There would be some astonshment if | it were possible to report in detail the
 character of the labor cheerfully per | formed by those who accepted leadership | in the national cooperation organized to protect the situation. Day after day, and | in the busiest hours of the day, repre- | sentative bankers have ben at the clear | ing house for the purpose of facilitating operations there. These men have worked l far into the night They have held many l earnest consultations which, as a whole sentative bankers have been at the clear l spondence has been enormous. It was ex- l tremely difficult to work out the plan to create a gold fund of $100O0O.0000 There were many technical difficulties and em- barrassments to meet and to overcome. It was noedful that bankers in other parts l of the country be appealed to. not in any | domineering or arbitrary manner. but in | such form as would be certain to persuade these bankers that it was their privilege as well as their opportunity to cooperate in this work A good deal of tact was en- tailed in this leadership.
 For all these services the American bankers who have been leaders in the co- operative movement have received not l ms penny and expect to receive not . cnt for their services. Of course, they were, from one point of view, led to this action from a sense of self preserva- ton.
 Prominent in this work of cooperation was the young man, Benjamin Strong, Jr. who had already gained, when al- most as young as Alexander Hamilton was. when he wrote out the plan for the first United States bank, a reputation among American bankers for the posses sion of qualities which are necessary if a man Is to be statesman banker.
 His name, however, was unknown to the public until suddenly there was this lideutjf1ca tfnp of him one of the great