The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-09

the Feuprnl ReServe bOaru, anu INC
committee can render Its best possible
service by considering its work rs ex-
tremey experimental, guiding Its ac-
ton by well known facts as to the long
est bished movements Of trade and
money 1t would he relatively easy to
select minimum Of eight cities In
which TO establish Federal reserve
banks. and to outline temporary re-
serve districts with tentative bOunda-
res No great mistakes could be made
In doing 50. and Ms experience demon
stra ted the necessity the Federal Re-
serve Bonrd could make subsequent
adjustments.
However, the committee has not seen
tit Ia go about it's labors In this sensi-
bic fashion. Its purpose seems to be to
anticipate as far as Il can the duties
dcvoving on the Federal Reserve Board,
and in order that there shall he no
misconception about the committees
powers attention may he directed to
some special features OF the Federal
reserve act.
Subject tn the arrangement which
the Federal Reserve Board may see ut
to make the law imposes only one re-
straint on the organization committee.
!, is required 20 dr;uc the Federal re-
serve districts with due regard to the
convenience and customary course OF
business" Whether or not such regard
is likely to be displayed Is somewhat
doubtful. judging from the committees
attitude nj the hearings In this city.
but in other respects the organizers are
authorized to do pretty much as they
please There is nothing In the act, for
example. which requires that reserve
district must he Il compact whole. Geo
graphically 1t may consist Of isolated
stretches of territory.
or more consequence Is the fact that
the section of the Federal reserve act
! dealing with the reserves Of member
banks may make district gerry
ma nder unnecessary II the committee
desires TO prevent the creation of one or
two Federal reserve banks which should
he vastly larger and stronger than the
others. 1t Is directed that what are
now country banks and reserve city
banks I'm the present national bank sys-
TEN shall deposit part of their reserves
in the Federal reserve banks of their
own districts. In the case Of banks In
the present central reserve cities 1t Is
I ordered merely that the part Of their
reserves which they must deposit In
Federal reserve banks shall I've depOs-
tied "in the Federal reserve bank" the
phrase "of its district" which occurs in
the paragraphs relating to other ma
liona banks. being omitted.
Furthermore, it is stipulated. immc.
diately after the provision made for
banks In central reserve cities. that
amy Federal reserve bank may receive
from the member banks AS reserves"
one.half Of the deposited reserves In
paper eligible for discount under the
terms of the act. II is not provided
that Il Federal reserve bank may re-
ceivc such deposits from Its" member
banks. but from the" member banks
and the peculiar Language Of the stat
which may compel national banks In
this city to place in Federal reserve
banks throughout the country that por-
ton of reserves which they cannot hold
in their own vaults, instead of placing
part or all Of such reserves in the New
York reserve bank--if there Is to he a
New York reserve bank.
OF that some doubt Is permissible
after the attitude assumed by the Nc
!. Adoo committee at the local hearings
Just concluded although i, is queer that
there should be any argument either
rs to the establ >hment Of Il Federal
reserve bank here or as to its strength
and size. Financial supremacy is the
natural attribute Of the metropolis of
any country. New York Is the metrop
oils of the United States as the out
come Of economic evolution. 1t Is the
result OF a superiority Of natural nd
vantagcs plus almost three centuries
I of history.
According to the Census Bureau II
ranked first among all the cities Of the
country in 1909 in the value OF its man
ufactured products. which aggregate,
almost S3.0OO0O.OO0. This total wa.
about ca per cent. larger than the pro
duction credited to Chicago and wa.
greater than that of the output Of any
state except New York and Pennsyl
yania According To the report OF tn,
state Superintendent Of Banking FOL
: the year ended September 30 last NOR,
than one-siXth of the banking power OF
the entire country was represented by
! the state banks trust companies ant
savings banks OF the Empire State
The assets OF these institutions wer,
Z equal to more than one-third Of the as
sets OF all the national banks OF tn,
land and their deposits were equal (,
almost onehalf the total deposits II
l the national banking system. This ex
hibit did not take any account of tn,
n