The Birmingham age-herald., 1914-10-31

or modern banking activity and f,rtbar- more. because of the confidence in tbai- absolute impartiality and sincerity. so that they could be counted upon for ad- ii,ihisterlng their office in the full sense Of their responsibility to the American n people.
 AS 1t Was in New York
 When the organization of the federal re- serve district of which New York city is the center was under consideration, and especially when the time came for select Ing officers of the federal reserve bank in New York city, 1t was observed that every banker who was under this considers tion was In one way or another associated With the so-called money group or power. Benjamin Strong, Jr., who Is the execu- tive head of the reserve bank of this dis trict, went directly from one of the so- called Actresses of the money power to the new national institution So, also, Pierre Jay, intimately associated as p,esi- dent of the great bank which was estab- ltshed by Aaron Burr 125 years ago was with the leaders in New York banking life. These two and others who are to manage the New York institutions were selected because they had demonstrated tfat they possess constructive ability of high order and because not the slightest doubt existed that they were to direct the affairs of the New York reserve bank through sympathy with the principles which are embodied in the new national law.
 It would be possible to extend this H. iustration by referring to Chicago and. possibly. one or two other federal reserve cities. Those who drafted the federal re- serve law and the bankers of the United States who are about cordially to co-op- crate in the establishment of the new organization seem to be of the opinion that not the least of the lessons which this new organization has already taught and is to continue to teach is that in a country like the United States 1t is im- possible to establish a money power in the sense in which that term has been used. whereas. on the other hand, 1t is inevitable. as well as necessary, that there be one great financial center which will be the heart of the national financial system.
 1907 and 1914
 At the time of the currency panic of 1907 and occasionally after that panic was ended the accusation was made that the panic was brought on by the money power deliberately with the intent to reap large profits out of the country's distress. No one who had opportunity for actual obser- vation of the leading bankers of New York at that time could have believed the &C., cusation None of those who knew what had been in progress for two or three months was ignorant of the fact that tho bankers were using every conceivable means to prevent disaster. The panic of 1907 undoubtedly caused the growth of public opinion which at least compelled Congress to frame new banking and currency law. In the framing of that law. the legislators gave heed to the counsels of some who had been identified with the so-called money trust. and 1t was discovered after awhile that, as a whole, the bankers of the United States encour- aged Congress to perfect a new bank ing and currency law on the lines which afterward identified the law.
 In 1914 there Is another object lesson which is especially impressive because the teaching of 1t is coincident in point of time with the chaos and the emerging from that chaos which have character ized our banking and financial life since August 1. The new federal reserve sys- tenn was in process of establishment when the continental war in Europe began, and the progress of the organization has gone on step by step with the unparalleled financial achievement of the American bankers. In the sense in which the ac- cusation was originally made, there has been no real money power in the United States. In the sense in which the term the financial metropolis of the United States is properly used, there were con centration of banking resources and CO., operation between the banks unlike any thing which has taken place in the United States since banks were established here Without such concentration of resources, such, for instance, as that which made the underwriting of two gold pools--one exclusively for the city of New York and one national--possible. chaos would still prevail. The city of New York has undertaken to finance and aided in financ- ing approximately $300. .000, 900 since this war began. That would have been impossible if there had ben no concentration of banking resources in New York The na- tion as a whole has undertaken, or Is about to undertake. the financing of $2S5,- 0O0.000 of which the city of New York is to contribute nearly one-half One hundred millions of this is the gold fund now underwritten with which payments can be made on current accounts of Eng land and Europe and the other is fund of $135,000.o0o, which New York will par ticipate in to the extent of $50,00O, 900. whereby the embarrassment of the cot ton planters in the south can be ameli- orated. All of this has been done by the voluntary concentration of resources with the moral approval of the federal reserve board. The new federal reserve system will be in operation after a considerable part of the fog has been lifted through the voluntary action of the bankers of the United States.