Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1914-05-08
NEW ACT.

NEW CURRENCY ACT.
Bankers will await with interest
announcement of the three directors
of the ninth district regional bank to
be selected by the federal reserve
board. According to the cur
rency law, each regional bank
is to have nine directors: Glass
A, Three directors selected by, and
be representatives of the stock-hold-
ing banks; Class B, three directors
who shall be representatives of the
general public interests of the reserve
district, and Glass C, three directors to
be designated by the federal reserve
board, one of the later to act as
federal reserve agent Or manager of
the bank and chairman of the board
Of directors.
Directors in Glasses A. and B. have
been selected and, with the selection
finally of the members of the federal
reserve board, will come the naming
of the other three directors.
President Wilson probably did not
indulge in any idle hyperbole when
he said that the federal reserve board
was fully as important as the supreme
court. Its Importance cannot be over
estimated, but only time will tell of
the efficacy Of the system and of the
ability of the board to administer it.
Every Twell-meaning banker and bus
mess mai hopes that both the system
and the board will work out, although
some changes doubtless will be made
in the act before it has been i'll force
many months. Id
Conditions seem chaotic now, but
bankers hope that matters will clear
soon. How to go ahead with launching
the system is troubling even the fed.
eral officials, but time should bring
adjustments and point the way.
\
There is one danger in the situation
which all bankers apprec' ate, and that
is the possibility of politics entering
into the appointment of the reserve
board. The term of the member ap-
pointed for 4 years will expire in April
1918, and Of the one for 6 years in
April 1920. Thus both of these posi-.
lions, in addition to the appointment
Of the Secretary Of Treasury, may be
filled by a new president. The term
of Office of the Comptroller of the
Currency appointed in 1914, being five
years, his successor would be named
by a new president. 1t is evident
that a majority Of the board (four out
of s~even), could be reconstructed in
the term of the next president.
There should be no confusion in the
minds of the public as to the function
of the federal reserve banks. They
are banks for banks, and with but few
exceptions, not a bank for the public.
OF course, the operations Of the
bank are intended to rebound to the
benefit of the public, and primarily
are established to accomplish the fol.
lowing purposes:
!. An elastic currency through
the power of issue.
2 Through the discount function
elasticity of credit.
3. BY operation Of the deposit
function a mobilization of bank
reserves for the purpose of co.
operation in times of financial
stress.
4. Abolition Of the present indie.
pendent. and somewhat cumber.
some treasury system
4 4 X
When these functions are scrutin-
lied, even the average banker realizes
the tremendous Importance Of pick
ing the most intelligent and skilled
bankers as directors of these regional
banks. The directors only serve for
q term of three years. Whether the
tenure is long enough time only will
tell.
It is interesting in this connection
to know that the possible aggregate
resources of all the reserve banks may