The Birmingham age-herald., 1914-08-17
WORLD IS
 PLEASED WITH DELANO
Holland Discusses Matters Pertinent to Organization of Federal Reserve Board
By HOLLAND


 President Wilson of Frederick A. De- lano of Chicago as member of the federal reserve board was spoken of with commendation in the financial dis trict in this city. A comment frequently made was that although MT Delano was a second choice, nevertheless it may be for the country at large even a bet ter choice than was the one first made by the President. With Mir. Warburg 1 of New York, MT. Harding of Birming ham and Mr Delano of Chicago as members there seems to be, in the opin- ion of those competent to express an opinion. an admirably well balanced board. supplemented as these three men will be upon the board by the two oth- CTS whose nominations were speedily confirmed by the President.
 Mir, Delano is one of three men who have served or are now serving, as presidents of important railroad com panies who are graduates of American universities. Harvard's diplomas were conferred upon Mr.. Delano and How ard Elliott, and Yale's upon Chauncey M. Depew. Julius Krutschnitt, the lead
  ern Pacific. was graduated at a tech nical institution.
 Like Howard Elloitt, MT. Delano be- gan his railway career with the Bur- lington system and worked his way up at first through the engineering and mechanical department and then through the operating department until at last he became vice president of the Burlington and, later, president of the Chicago, Indianapolis and St. Louis Railroad company. It is thought here to be fortunate that one member of the reserve board has had long experience and intimate association with impor- tant railway management, principally in the Mississippi valley. He knows the relations, financial and industrial, be- tweeen the people of the United States as we'll as any other man of his years. In some respects, especially in the con structive character of his intellect and his understanding of the real philoso- phy of railway management and of the perfect cooperation between the rail- roads and the people, he resembles much older man, James J. Hill.
 1He1t SiiOulu ot hO oilAittisf i'f N''~ speedy organization of the federal re- serve system. The national banks of the United States which with only few exceptions are qualified for member ship in this system are ready to take up the practical application of the sys- tenn as soon as the federal reserve board pulls open the stops," so to speak.
 An Important Question
 One of the early questions which the reserve board may find it expedient to consider vii be the best method of providing for the contraction of fed eral reserve notes There has always been some apprehension that possibly imitation might follow the issuing of federal reserve notes. They can be issued easily enough, the doubt has been whether they can be as seaslly re- tired so that there may be secured that perfect elasticity which is in the high est degree desirable Those quahhed 10 speak say that the decision of this ques- tion will rest entirely with the govern ment of the federal reserve district. They may follow the example long ago established by the stock exchanges Tn this and other cities For instance, when it is brought to the attention or the governors that this or that trader IS venturing beyond his depth carrying on business in excess of the prudent limitations of his capital, they summon the trader before them. They say to him frankly that it is within their knowledge that he Is carrying on more business than his capital justifies. They therefore warn him to limit his en- deavors.
 conspicuuos instance of this knd oc- cured in the guerrilla-like career or 'onh w. Gates. It reached the ears or the governors of the stock exchange that MT. Gates was going too far, that he was op- erating beyond his strength. He was therefore summoned and advised that II was the opinion of the governors that ne should curtail He knew what would nap pen if the advice were not taken. 90 1t may happen that under the advice or the federal reserve board the governors or the reserve districts may exercise con stant vigilance so that if any bank seems tc have been availing itself beyond the limits of prudence of the opportunities which the federal reserve system offers the officers of the bank will be cautioned by the governor not to go too Tar ana to limit rather than to expand It's activities'
 If this plan be generally adopted there is little doubt that the federal reserve system VIII De dpic u PtS'efis -- - fiation and to influence wise contraction.
 A Strange Coincidence
 One of the many coincidences. unexpect- ed and sure to become traditional which have followed the outbreak of war in Flu rope is the organiza ton at this time of our new national banking system. It Is to be perfected in war days. Had the system been in operation in the spring II is probable that some of the strain and stress which entail cooperation between the bankers and the government would have been prevented. Under the new sys- tenn 1t would have been comparatively easy to prevent exports of gold In case the amount of the exports seemed hkey to pass the danger line. Co-operation would have been more easily effected. Oi course the new national banking system cannot provide ways and means by whicn the farmers and other exporters can get their commodities to the markets. But the system can provide financial assistance which will carry the farmers and other exporters through the season of suspense.
 Ii Is thought in this city that as soon as readjustment of our commercial af- fairs to the conditions created by the war in Europe has been effected we shall see very great increase in our export trade. It may begin as suddenly as it was stopped. Some of the great American in dustries which for a month prior to the