The Birmingham age-herald., 1914-10-21

made by those in authority in the bank
 accompanied by the condition that the
 federal reserve board should approve this
 underwriting and control it's distribution.
 When the bankers cheerfully accepted
 the proposition made by President J. B.
 Morgan of Chicago that Il gold fund be
 established by the underwriting of it by
 the banks of the federal reserve system,
 it was deemed expedient to confer with
 the members of the federal reserve board
 at Washington.
 The board gave it's approval, which was
 wholly moral and not authoritative, and
 it was in a measure due to this attitude
 of the federal board that the syndicate
 was organized and the 100000 gold fund
 underwritten by all of the banks is now fin effect.
 Those who attended the meeting of the annual convention of the American Bank CTS association and who at adjournment passed through New York city are re- ported to have said to thelr friends here that the various complications, the highly artificial methods that are HOW. in prog ress for mastering the situation and the embarrassment of the federal reserve board occasioned by its lack of authority tc accept certain responsibilities furnish arguments, which by and by the people will understand, in favor of the eatap- lishment of unified bank. During the six years of the agitation in favor of reform of our banking and currency svs- tenn, public sentiment in many parts of the country set emphatically against the organizatio of unified or what Is com monly known as a central bank. as the keystone of the new national bank snd currency system.
 The apprehension was great that in that way a new money power would be ere ated and that high banking authority would obtain control of the central bank and operate it to serve selfish purposes. Yet the national monetary commission and the members of Congress who with pa tience and earnestness worked out the bill which at last became law, and upon which the new federal reserve system is to be based, recognized the necessity Of
 establishing some central authority. The political or public point of view, how ever, made it essential that this should be accomplished by a sort of disguise. The federal reserve board was created and in some respects 1t has the authority which would appertain to a central or unified bank. If the federal reserve board
 would have such authority as would make
 unnecessary the voluntary cooperation
 of the American national banks entered into for the purpose of securing means whereby the financial difficulties could be overcome. The federal reserve board, as director of the unified bank, might so control or direct the resources and the credit giving powers of the national bank as sufficiently to relieve the feverish em- Larrassment of the cotton producer. of the south. So, also, an institution of this kind could have been so managed as to
 make it unnecessarily by voluntary cooper ation to establish or underwrite q gold fund of s100,000, 900 to be used exclusively to aid American debtors to creditors in other lands whose debts reflected chiefly commercial transactions.
 Wheels Within Wheels
 At this time there are under way sey- eral propositions of magnitude in which the national banks are interested and are taking part and which are of importance in the business and financial world of the United States First Of all, there is the movement of gold to Canada for the purpose of meeting the current obliga- | tions of New York city on account of short-t time notes. This involves an un- derwriting syndicate which included all but two of the banks of New York city. | It has already caused large amounts of | gold to be sent to Ottawa against which | exchange can be drawn available for meeting New York citys pending obli- 1 gations abroad.
 1 Tn the next place. there is the now
 completed underwriting of a gold fund amounting to $1o0.000,000 to which all of 1 the banks of the federal reserve system have pledged themselves to pay theii
 proportionate part. They are already | paying on account of the first call oi
 S25, 900 900. This gold is to be within the control of competent committee which
 will sell exchange against it, taking care
 that these sales do not accommodate l spectators or persons not entitled to as- sistance.
 l In the third place, the banks which are members of the federal reserve system have within a few days been notified 1 that they must pay on account of the first installment of the capital stock oi | the federal reserve banks. These pay
 ments are to be made upon the day be-
 fore the election of members of Con-
 gress, and soon after the banks of the | federal reserve system have received l their stock holdings in the federal reserve
 banks in each of the systems then 1t vii