New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-06
BANKERS HEARD ON
RESERVE DISTRICTS
How to Keep New York,
with Its Correspondents,
a Difficult Problem.
CONTROL OF TOO MUCH
CAPITAL HERE FEARED
Paul NJ. Warburg Would Divide
the Country Into Four
Operating Groups.

Confronting what Frank A. Nanderlip.
president Of the National city Bank dc
clared was an "insoluble problem" the
organization committee of the Federal
Reserve Board. under tho new currency
act. began its hearings yesterday 10 DC
tcrmine the best division Of the country
into not less than eight or more IMAM
twelve reserve districts.
William G. McAdoo. Secretary Of the
Treasury and David T. Houston. Secre-
tary Of Agriculture. opened the four days
session ip this city in the Chamber OF
Commerce. with them was large stan
Of clerks and assistants. all OF Whom
later 20 continue tho investigation
throughout the country.
The list Of those who appeared before
the committee TO tell their views or the
proper method OF dlstricting the country
reads Ike a who's Who" in banking
There were Frank a Vanderlp. Francis
]. Hine, president of the First National
Rank; James c. Cannon, president OF
the Fourth National Bank; a. Barton
Hepburn. chairman of the Chase Ma
tional Bank and member of the Chamoer
Of Commerce in charge Of its study OF
president of the Chase National; A ).
Hemphill president OF the guaranty
Trust Company; Paul NJ. Waroure' OF
Kuhn. Loeb & Co.. and others OF sirniidr
prominence. Financial experts VINO nave
appeared before the House and Senate
committees which prepared the currency
act also appeared.
From the questions asked by Mr. NC
Adoo and Mr.. Houston II appeared GER
tain that New York City would be desls-
mated as headquarters OF reserve uis-
trict. and that Chicago, St LOUIS anu
San Francisco were almost equally GER
tain of designation. Boston AtIan'a'
Denver and possibly philadelphia also
appeared 10 have received the principal
secondary consideration.
In the limits TO be placed upon the
federal reserve district served by New
York CITY the committee apparently faces
&c chief difficulty. Both from the vari-
ance Of opinion expressed by the bankers
and in the geographical and financial
rrobIems of the territory. it seemed GER
tain that two questions are gong 10 NC
the hardest to solve in the installation VI
the new currency system
To prevent an arbitrary separation OF
New York CITY from banking facihtes
il has extended to those within us zone
of'exchange of banking paper and corre-
spondence il will be necessary, the COM
,ittee was told. to include much OF the
territory Of the North Atlantic COAST
and vet If this is done. as Secretary NC
Adoo observed. 40 per cent of the national
sank capital Of the United States VIII re
centred in one Of the reserve banks alone.
The other chief difficulty, according 10
Mr.. Nanderlip. is in avoiding conceh-
,ration of members of a federal reserve
hank whose business results from the same
industry. If this is not avoided. he point
"a out il would be inevitable that de-
mands would be made upon the reserve
hank from the same industries at the
same time and the reserve institution
would he forced TO call upon its asso-
ciates for aid. Mr.. Vanderip's sugges-
ton Is a "shoestring'' district geosraphl-
cally. but this. he admitted, would 20
impossible for New York.
Because OF the relative importance OF
the institution Of which he is the head
and from his remarks the views ex-
dressed by Mr.. Nanderlip seemed or the
greatest interest to the score of bankers
gathered in the chamber at the hearing.
ut Is not vet important" began the
president of the National City Bank, Ito
consider how large geographically the
New York district is to be. New York
predominance in banking is such that its
district will be large in any event and
n will not be necessary 10 take In any
great territory I'm addition
Il have no definite Views of the Seog-
raphy of the district but have decided
ones Of the dcsirability of having dis
trict with a variety Of industries. would
favor a 'shoestring district, embracing
agricultural, banking, manufacturing and
other industries. but this would be hard
10 get here
How important" asked Mr.. McAdoo
.do YOU think II is to have the reserve
hank accessible TO its members?'
"If branches are 10 be established
through the district ! do not think 1t is
important" he replied
.But don't you think il necessary 70
have the members subject TO oversight
and control" the Secretary continued.
Mr. Vanudelip paused and leaned for
ward impressvely.
Oversight and control. Mr.. McAdoo
SMELLS the whole story. If there is proper
oversight and control the thing will work
although II is defective law. II it is
not properly done. the system will be full
OF the gravest dangers
"That is true OF any business" COM
mented Mr.. McAdOo suavely.
"New York" continued Mr. Vanderlip
SIS the United States in many things
II feels the demands Of the whole coun-
try quicker than anything else. 1t is sub
meet 10 a variety Of conditions from all
'parts of the uountry. Because Of the
dominance by New York. think
would be best TO have each reserve bank
about the same size in regard 10 its
capital. but Of course that is impossible.
Il think you are facing an insoluble
problem, IL you are 10 try TO get a