The Washington times., 1914-04-03
THE REGIONAL RESERVE
BANKS.

termined the selection of the twelve
regional reserve cities. Pour re-
serve districts are created that may
be regarded as distinctively South
ern. Three of them are in Southern
cities-Richmond, Atlanta, and Dali
las; another is in the border city of
St. Louis, but has assigned to it a
territory that is preponderatingly
Southern.
Political considerations. conscious
iy or unconsciously, so far as con-
Germs the organization committee,
must have been considered in that
distribution, and they ought to have
been considered. If only eight banks
had been created, 1t would have been
quite possible to give the South only
one of them. Baltimore is a moro
important financial and commercial
city by far than Richmond, but Bal
timore is a border city, between the
sections, and Richmond thoroughly
Southern one. If Baltimore had been
named, it would have been possible
to place another of the banks at New
Orleans, and to assign to St. Louis
Southern and Southwestern terri
tory. That would have left New Or
leans the only distinctively Southern
city in the entire list, and it would
have teen an arrangement highly un-
satisfactory, and justly so. TO the
pride and sensibilities of the South.
1t is vastly better that the South
be taken into the new system on
basis that gives it the largest pos
sible assurance of financial indie
, pendence, or at least the opportunity
tc develop that independence with
the development of the system.
/ Without much doubt, these are the
considerations that lost Baltimore
and New Orleans their places in the
; list of reserve cities. The South,
, with its big financial lines leading
to cities on the border line of the
two sections, would be warranted in
feeling that there had been discrimi-
nation against it.
Beyond this, there was another
problem of policy to be considered.
President Wilson was once quoted,
during the consideration of the cur
rency measure, as desiring to use the
new sytsem to "fluctify the lean re-
gions." That could mean Only that
| he had in mind establishing Of as
large measure of financial auton-
. omy as possible in sections hereto
, fore largely dependent On distant
and comparatively unrelated parts
of the country. In giving the South
four reserve districts this ideal has
been followed.
In the East, it will be observed,
another general policy has guided
the work of the organization COM
mittee. There was a time when
Philadelphia feared it would get no
regional bank at all. Instead, il gets
the third largest of the twelve, and
! gets it at the expense of both New
| York and Baltimore. Boston was
fearful for a time that it might get
! no bank, but it is given very i'm
portant one The explanation frank
| L. -,,a--aI g that lneI,oI 70
disintegrate, so far as feasible, the
fabric by which the grip of New
York is fixed upon the financial
/ structure of the East. Pittsburgh
loses a place in the list of reserve
cities for like reasons, its affiliations
are so largely with the East that it
was left out, in line of the policy of
| drawing away from centralized
! Eastern system; and Cleveland, a
distinctly Western town as Rich
| mond is Southern one, gets the
! bank for that region.
/ From Kansas City and Dallas all
/ the way 20 the Pacific Coast there
! is 70 bank. Salt Lake and Denver
both aspircd; and Seattle had strong
hopes of securing an institution to
divide with San Francisco the coast
and mountain territory. But the
case for either Denver or Salt Lake
was never strong, because the cstab-
/ liahed lines of commercial move
ment naturally affiliate their terri
: tory with centerS cast OF them.
/ Moreover, the sparsity of population
| in the intermountain States made it
difficult to bring into such district
enough banking capital to insure a
powerful institution, withou. ever
stepping all the bounds of convenic",
! business association.
! Considering the new system rs Il
uIIitv. ard assuming that inc twelve
/ closely united regional banks a.'e in
fact divisions Of rev Bark of the
| United States. we find hat the pre-
pcnderating power Of New York,
which gave concern to some people,
! H.. L<,,, ~, ~, faco Of !Ia .irrIrnC