The Washington herald., 1914-04-13
The Federal Reserve Districts.

UnoficiaIy. yet presumably with authority, the
reorganization committee which has recently defined
the boundaries for the districts of the United
States and has nominated subject to the approval of
the Federal board the regional cities has announced
thai its sole desire make the districts nearly
equal as possible tar as financial importance is
concerned
II is presumed TO be an ideal contemplation, yet
seems TO lack due consideration of the fact, which
all financial history teaches, that sections of
try are not made OF equal financial Importance
through any influence of legislature.
In New York City astonishment has been
expressed that the organization committee tore apart
ard away from New York considerable proportion
OF the metropolitan district and assigned it Phil
adelphia. Not from New York City does any con-
siderable protest against this arbitrary division
but from that part of the metropolitan district which
lies lust beyond the Hudson River in New Jersey.
there has come earnest protest.
One distinguished member of Congress is quoted
having said that after all the choice OF this that
city the location for regional bank is of only
sentimental consequence since the needs OF district
will he cared for by branch banks.
But what branch banks They are simply
side doors the regional banks and substantially
part OF the regional bank organization
In order establish equality of financial inn
portance the organization committee has made choice
OF Richmond, Va wherein is to he established the
regional bank for much OF the South which is east
of the Appalachian range. In defense of that selec-
tion reference is made to comparative figures which
seem to show that Richmond docs larger banking
business than Baltimore Yet Baltimore is a great
commercial metropolis Its prestige in that respect
cannot be impaired. permanently by the exclusion
OF the city the regional center BaltimoreS COM
merce will always be far in OF that of Rich
mond and in international relations which hereafter
are to be OF especial consequence Baltimore will stand
pre-cmnent among the cities OF the Atlantic coast
south of Philadelphia
This is also true of New Orleans 1t may be that
Atlanta discounts notes and carries larger
line of deposits than New Orleans does. But that
city has been for century the commercial metrop-
oils OF the South. 1t is one of the greatest ports
OF the world. Its influence and importance to be
greatly and favoraby affected by the opening of the
Panama Canal And these influences which
quite important as any suggested by the amount
OF paper discounted by the banks OF any city the
amount of deposits carried by these banks.
The organization committee undoubtedly worked
in all sincerity. 1t worked however with an estab-
lished ideal. A part of this ideal made up of
determination to decentralize the financial influence
and authority of New York City.
No legislation excepting that which represents
chaos and anarchy impair the financial impor
tance of New York. Legislation has yet found the
way TO make water up hill Even the syphon
does thai only temporarily for after has exeted its
influence water again is master of the situation.
New Iorks supremacy money market can
not be impaired for the reason that the city is and
must continue to be the commercial metropolis. 1t
is not merely local community, but it represents
IF he pdr h,sioe
life OF the nation. That is as true of New York
as it is true Of London, Paris Berlin
1t is especially true of New York when American
relations are considered In New York
City the quotations OF foreign exchange have long
been and will always continue to be made Let any
other city which represents the ideal of the organza
committee to scatter and equalize financial i'm
portance. undertake to get gold from Europe. Eu
rope will not ship gold to other cities than New
York. Chicago some years ago made the attempt to
secure importation OF that kind and satisfied
after having bought half million in gold that it
was to New York alone that Europe would ship its
gold. One financial institution in New York drew
bills on nearly two and one-half million bales OF cot
ton last year. rcckoned at average of 500 bale
and the aggregate amount OF bills which it drew on
American commodities was S2,36Soooooo. Business
OF this kind will be maintained matter how the
Federal reserve districts may be ultimately bounded
Let those cities whose inhabitants have been dis
appointed because selection made of these
cities by the organization committee, be consOed
Financial Importance will be attained through
arbitrary establishment of boundary lines for Fed
eral reserve districts and disclosure will be made of
the truth of this statement before the new banking
law has been long in operation.
CLINTON T BRAINARD