The Sentinel=record., 1914-04-05
CRITICISM OF
 RESERVE CITIES
LOCATION OF TWELVE RESERVE BANKS COMES IN FOR MANY
 SERIOUS OBJECTIONS.
Committee Claims to Have Been Guided by Vote of the Banks in the Different Districts.

Washington April 4.-Members of the reserve bank organization com mittee continued silent today, al though criticism of their selection of reserve cities and their division of the country into banking districts was still heard in congress.
 No official explanation was forth coming in defense of the committees choice of cities, but an unofficial view here was that some of the criticism has a political tinge, Defenders of the committee declared tonight that no matter who had been charged with the responsibility of setting up reserve districts, they would nave reached fundamentally the same col. clusion as the committee.
 Apparently the most vigorous crit icism has been directed toward the choice of Richmand, Va, in prefer ence to Baltimore or Washington, and of Atlanta instead of New Orleans. It was said, however, by those fami- liar with the committees delibera- tions that the trend of trade from the south is north and eastward and not toward New Orleans, and that in con sequence Atlanta is more strategically located for a reserve bank.
 In defense of Richmond it was ar gued that closer business relations with the south prevail there than in Baltimore or Washington.
 One fact that was brought out was that a poll of the national banks which had signifed their intention ot entering the system was taken into consideration in naming the cities. In every district but one a majority of the banks favored the cities chosen by the committee as a reserve cen ter.
 Some surprise was expressed at tha critics who dwelt upon the fact that the New York district does not in clude Jersey City, Newark and some nearby Connecticut points. l. was recalled tonight. however, that the fact that these cities are put in the Philadelphia or Boston district Will not prevent their having about the same relations with banks in New York as at present. About tine only difference will be that their reserve funds will not be kept in New York.
 In this connection it was sail that under the present system more than $500 900, GOO of reserves from small banks throughout the country is usu- ally on deposit in four banks, in four gerat cities. Tn times of stress, as ia 1907, much of this great sum is cut in call oans When 8 crash comes, it was argued, the small banks are likely to find themselves unaO Q to get their reserve funds from these cities
 It was largely to cure such a cen dition. it was said, that the distr.cts were designed to be as nearly alike in capitalization of reserve banks as possible, with the idea that there shall be no such concentration of re- serves in the future.
 The charge that the committee was playing politics in it's selection was met tonight with the assertion that if politics had been a factor the com mttee would have been inclined to give a bank to Lincoln, Neb., the home of Secretary Bryan; to Louisville, where Senator James was anxious to see one located, and to Denver, ia yored by Senator Shafroth, who gave aid to the administration in the fight for the currency act.
 No formal protest against the com mittee's selections reached the treas ury today, but several telegrams were received from commercial or ganizations and business men in cit ies which failed to get banks com mending the committees choice.