Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-04-03
Object of Criticism.

The most severe criticism. however
and one in which I am unqualified, is Of
the committee tangoing about the
country for the purpose of asking peo-
pie If they wanted a reserve bank. OF
course, the local pride of every COM
munity would develop the same reply.
and this has embarrassed the commit
tee so that it has authorized twelve
banks, very materially weakening the
system by so doing, and developing a
system for which there was really no
demand.
II do not wish to appear in the po-
sition of a carping critic. but the result
Of the work of the committee bears
out the criticisms made at the time
Of the passage of the bill. The proper
method by which to organize this sys-
tenn was to appoint the reserve board
that was to manage the system and
let them organize it Then the or
ganization would have been as far as
possible removed from political con-
siderations. Now. having been organ
lied by an essentially political and
partisan board, it bears all the ear
marks of result which might have been
anticipated from such procedure"
Cities to Get Banks.
Although various steps still must be
taken before the new federal reserve
banking system begins operation Treas
ury officials expected today that the
twelve regional reserve banks would open
for business within three months and
that the revolutionary change in the
nations financial machinery would be an
accomplished fact within that time.
he oP tha
centers the organization committee
took the first decisive step toward per-
lection of the system The cities named
Richmond. Atlanta. Cleveland. Chicago.
ST. Louis. Minneapolis, Kansas City,
Dallas and San Francisco
The first work today was official GER
LITIGATION to Controller of the Currency
Williams of the selections and Mr.. Will
liams began the task of notifying every
one of the 7,54s national and state banks
which have applied for membership.
Must Begin Payment.
1t was the general expectation that
member banks In the twelve districts
would Immediately begin preparing for
the establishment Of their reserve banks.
Every bank under the law must begin
payment of a subscription Of per cent
of it's capital and surplus to the stock of
its reserve bank within thirty days after
notification.
In accordance with the law, as soon
as the member banks in district have
subscribed the minimum amount Of stock
for reserve bank-$4. 600, 0Oo-five banks
will be designated to execute the formal
certificate of organization. After its re-
ception here the reserve bank will be-
come a corporation and entitled to be-
gin business.
The next step will be the selection Of
boards Of directors for the reserve banks.
There will be nine directors for each
bank, three to be appointed by the fed
eral reserve board. which itself is yet to
be named by President Wilson, and six
selected by the member banks in each
district.
Committee May Act.
is to choose three directors in each
reserve bank and appoint q reserve
agent for each bank who is to act as
it's mouthpiece. and organization COM
mittee may perfect the organiza ton Of
reserve bank for all practical pur-
poses before the reserve board is ap-
committee will exercise this authority
to launch the system as soon as pos
sible.
In the opinion Of officials here tho
transfer Of money from member banks
in payment of their subscriptions to re-
serve banks will be accomplished with
out disturbance to business and without
auy curtailment Of credit or retrench-
ment in loans or discount. The law
gives nearly year to the banks for the
payment of one-half Of their total sub
| scriptions, and it was believed that this
| time would prove sufficient in every case