Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-04-06
RESERVE BANK
ORGANIZATION
HOLDS SILENT

Washington, April 5.-Members OF
the Reserve Bank Organization COM
mittee continued silent Saturday, al
though criticism of their selection of
reserve cities and their division Of
the country into banking districts are
still heard in Congress.
No official explanation was forth
coming in defence Of the committed s
choice of cities, but an unofficial view
here was that some of the criticism
has a political tinge. Defenders of
the committee declared Saturday night
that no matter who had been charged
with the responsibility of setting up
reserve districts they would have
reached fundamentally the same con-
clusion as the committee.
Apparently, the most vigorous criti-
cism has been directed toward the
choice of Richmond, Va, in preference
to Baltimore or Washington, and of
was said, however. by those familiar
with the committees deliberations,
that the trend of trade from the South
is north and eastward and not toward
New Orleans, and that in consequence
Atlanta is more strategically located
for a reserve bank.
In defence of Richmond it was argued
that closer business relations with the
South prevail there than in Baltimore or
Washington.
One fact that was brought out tonight
was that a poll of all the national banks
which had signifed their intention of en-
tering the system was taken into con-
sideration in naming the cities. In every
district but one a majority of the banks
favored the city chosen by the committee
as reserve center
Some surprise was expressed at the
critics who dwelt upon the fact that New
York district does not include Jersey
City and Newark and some nearby Con-
necticut points. 1t was recalled tonight,
however that the fact that these cities
are put in the Philadelphia or Boston
districts will not prevent their having
about the same relations with banks in
New York as at present About the only
difference will be that their reserve funds
will not be kept in New York.
In this connection it was said that UNI
der the present system more than $780,
100000 of reserves from small banks
throughout he country is usually on de-
post in four banks in four great cities
In times of stress-as in 1907-much of
this great sum is out in call loans. When
a crash comes, it was argued, the small
banks are likely to find themselves I'M
able to get their reserve funds from
these cities.
1t was largely to cure such condi-
ton, it was said, that the districts
were designed to be as nearly alike
in Capitalization of reserve banks as
possible with the idea that there shall
be no such concentration of reserves
in the future.
The charge that the committee was
playing politics in its selections was
met Saturday with assertion that If
politics had been factor the COM
nittee would have been inclined to
give a bank to Lincoln, Neb., the home
of Sec. Bryan; to Louisville, where
Senator Jarses was ANXIOUS to see one
located, and to Denver, favored by
Senator Shafroth, who gave aid to the
administration in the fight for the cur
rency act in Congress.
No formal protests against the COM
mittee's selections reached the treas
ury Saturday, but several kilograms
were received from commercial organ
izations and businsS men in cities
which failed to get banks, commend
ing the committees choice.