The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-01-09
MORE REASONS FOR THE RESERVE


other course if North Carolina cities
desired To serve their own interests.
our relations with Richmond have been
cordial with tho exception of tho little
! unplcasantncss in freight rates, and
! we cannot afford to be small Just be-
| cause somebody else was.
Thus speaks the stalwart Raleigh
( Times in phrases which we could wish
I were read by eWxy citizen. The same
! spirit -pcrvadcs ali OF North Carolina.
Our stan representative, with the Wis
fitting Richmond party tells us in a
( private message that Carolina business
men state the case very much as does
| the Times
'If North Carolina cities desire to
serve their own interests" Richmond
is the logical site for reserve bank.
The reason IS not far to find. The aim
OF every banking institution in the
country IS 10 maintain, as far as pos
sible, It's credit connections and its
financial Affiliations. Virginia capital
finds ready borrowers in the South;
Carolina barks find helpful agents IN
Richmond; the men who arc building
zip the Carolina cities know that Rich
mond money is theirs without qucs-
ton in whatever amounts they may
need
Just as the continuance OF present
financial relations arc to tho interest
both OF Virginia ana of our sister
Southern States, so tho severance of
those relations by the establishment
of reserve districts separating the
states would at the loast be most re-
grettable.
Unless wo misintcrprct the terms
OF the Federal reservc act, as read in
the light OF the experience OF other
countries with similar Systems, the new
reserve districts arc to be In no small
measure financially autonomous Tho
reserve notes OF given district can
circulate freely. but they cannot be
tendored for reissue at any other re-
serge bank than that of the district
in which they originals. This Will
mean that the emergency currency, Is
sued to move the crops or TO overcome
special stringency, Will largely remain
within tho district where issued. The
result will 90 an invisible tarrler be-
tween states in different reserve dis
tricts.
Then, again, the discount rates OF the
various reserve districts will not nee
essarily be the same The law pro-
vIdes. as our readers will recall, that
each district reserve bank can fix Its
rate of discount from time 10 time
rs conditions warrant provision
that was much discussed while the bill
vas in ;he senate. AS consequences
ct this provision. contiguous States in
different reserve districts will hnd
'Aelr financial dealings complicated by
a different discount rate Thus. for
instanoe If Northern capitalists should
succeed in heir efforts to include Viz
ginia in reserve district with Balti-
'roro, White North Carolina would ba
| in the Atlanta or tho New Orleans
district. Virginia bankers might be
/ d'scountlng paper al 8 per cent, while
the 3ramch reserve banks In North
Carolina were asking per cent on
rediscouHt II IS needless 10 point OUT
The oonfusio1 that would follow.
The Times Dispatch does not. Of
course, anticipate that the operation
IF the Federal reserve act viii mean
disaster to any State or 70 amy exist
Ing channels OF trade But we nre
confident that much readJus,inent must
OF necessity follow the formation OF
Federal reserve districts, which VIII
divide territory now united by bust
ness connections and bankinc anilio
tions II is for this reason that we
view with genuine concern and shall
oppose with oil our power the proposal
To unite Virginia IN a reserve distric,
with Maryland, rather than with Nort,,
Carolina ana our sister Southern states
Virginia, the Carollnas West Virginia.
Kentucky ana Tennessee belong to-
gether in every way. To remove one
or two states from this group and to
unite them with q Northern reserve
district win DC TO upset existing chan
nels or trade and 70 violate the spirit
OF the reserve act
Il becomes daily more apparcnt
. however, that New York bankers are
( determined TO make their dis,ric, as
large as possible. we necd not fear
That tn" New York district viii over.
SHADOW the others ana will supply .
large part Of the total capital that car
/ be subscribed 10 The reserve banks
+ -\l' that the organization committee
need 90 to prevent this resurrection of
/ YAH street Will be TO fix harrow