The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-02-15
Does Not Agree That
Each District Must Be
Self-Sustaining.
GEORGIA SENATOR
STATES OPINION
Thinks Southeastern Sectio n
Should Receive Separate Re-
serve Region and Have Re
serve Bank-Appears Be-
fore Committee at Hear
ing in Atlanta.

Atlanta Ga, February IA sec
ton Of the country which IS self-sup-
porting two-thirds of tho year is en-
titled to receive a separate reserve dis
trict and a reserve bank under the
provisions OF tho new currency bill.
according to Senator Hoke Smith. Of
Georgia Senator Smith to-day SO In
tcrpreted tho so-called self-sustainlng
provisions OF the Law In e statement
before the organization committee OF
the Federal currency reserve system
here.
II am very strongly convinced that.
under this bill. the Southeastern sec
zion should receive separate reserve
district and have a reserve bank" tho
Senator declared
The fact that section OF the coun-
try finds II necessary 10 borrow money
from another section during a period
of crop movement" Senator Smith said
does not render that section dcpon-
dent"
This legislation" he added, does
not intend to put a Chinese wall
around each reserve district. and have
IT keep all OF ts money within Its own
borders. 1t carries facilities suggest
ed by the Secretary OF the Treasury
for the movement from one par, OF
this country to the other of resources
End of Two Dnys' II-nrInE.
Senator Smiths statement to tho
committee was made At the end OF IA
two days hearing OF arguments in
favor Of the establishment OF a Fed
orai reserve district In the Southeast
crn section.
By their questions Yesterday and to-
DAY. members OF the committee had
created the impression tina; ona Of their
pfoulei3s was 10 unite group of
called dependent states with another
group so independent as TO make the
entire region self sustaining under or
binary circumstances
Ihese statements led some To believe
mat II might be me purpose OF the
committee 10 create districts by COM
bining Southern and Northern States.
and locating the reserve banks at the
northern end OF The districts
Members OF the committee had drawn
from advocates OF reserve district in
this section the admission that the re-
Sion was not entirely sclf-supporting
throughout the year. Senator Smith
expressed the opinion That n bank in
this section would he self-s,ipportinc
according 10 his Interpretation OF the
aw. IN this connection lie said.
This blu requires eight banks, It
allows twelve. There are those who be-
lievc that the ideal system was TO have
hut one bank. and place all OF the
ono upon the theory that In this way
all the funds Of the country could be
utilized everywhere. and, OF course IL
tho country were sclf-suprorting the
bank would he
Takes Different Shape.
But the legislation took a different
shape. II required eight and allowed
twelve The only direction given To
the organization committee was that
they should consider convenience in
course OF business The first thought
In the legislation was convenience.
then. course Of business"
now 1 say that I consider bank
in this section would DO self-support-
ing"
At this point senator smith was
asked what district lac had In mind
lie named district composed OF Geor
Gia, South Carolina. Alabama. perhaps
AlssissippI, East Tennessee and pos
sibly Western North Carolina
In substantating his claim that the
district would he f-supporting. Senn-
tor Smith asserted that a misappre-
hension would result if one simply con
sidercd the figures fixed by the bills
payable from banks of this section dur
ing the months of August. September
October and 4 part of July and of No
vembcr, when the cotton crop comes
upon the market
II think. on my own observations
mat 20 per cent or the :ace of those
notes should be deducted to determine
the actual debtors status OF this sec
zion" he said.
To illustrate this contention. Senator
smith cited local bank which had
an average Indebtedness for August
September. October and November. evil
denced by bills PAYABLE of s6Ss474
This same bank Ind on deposit AMI
due ii from reserve banks si11.0O0, and
on deposit with other banks outside
OF this section for exchange $72195
Debtor Only sI5i.O0o.
Under the new system. this bank
was really q debtor only Sl56,O0O" the
speaker asserted. "This same bank.
during that period. had as an average
Si59.000 due II from other banks, in
process of collection. With the cstab-
lishment of n reserve bank in this i'm
mediate locality. these collections could
be settled much moro rapidly, and so
large sum would not be thus use1.
= In this way. you can see that all the
balance for which this bank was q
debtor outside of this section would !
be wiped out"
Senator Smith voiced the opinion that
New York is n debtor to this section
much moro than this sectioa is n
debtor to New York Eight months
OF the year our banks carry deposits
In New York and pay interest on them.
rour months of tho year VIC borrow
from New York. New York uses more
money out Of this section than we use
out OF New York." he added.
In speaking OF the law as inter
pretcd by him, Senator Smith expressed
the belief that the purpose of the bill
was to relieve pressure upon different
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