The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-14
Another Attack on the Banking
Centres.

AnOtuVU Ou
centres.
One of the most cumbersome pOr-
lions Of the Federal Reserve net Is
found In the paragraphs governing the
election Of directors Of the reserve
banks. Member banks IN each dis
trict have to be divided into three
groups. according to capitalization.
Each member bank selects district
reserve clector. who subsequently does
the voting for his bank in the choice Of
the Glass A and Glass Il directors Of
the reserve banks. Instructions which
have just been issued by the reserve
bank organization committee rcgula ting
the election Of Glass A and Class Il
directors include the following:
AT the same meeting at which the
district reserve elector Is elected each
member bank may. by its board OF direc-
tors. nominate for its respective group
one candidate for Class a and one candi
date for Glass Il directors.
Each group will elect one Class A and
one Glass L director The electors will
thstr orn group and not on all nominees
Of the district
The restrictive phrases which have
been italicized In the foregoing are
without warrant In the terms Of the act.
They are II manifest effort on the part
Of the organization committee to per-
vert the language OF the law to n pur-
pose which prevailed for considera.
BILE pcrioL during the Congressional
deliberations on last years currency
measure. but they constitute to-day n
defiant overruline OF the will Of Con
gress declared by the act finally passed
and signei last December.
The currency bill as passed by the
House last September included u
scheme for the election of reserve bank
directors which had rs its object the
crlppling of the power of the natural
financial centres. The aim was thus
expressed in the House bill
"Every elector SHALL within fifteen days
after the receipt of the said list tof dis
trict reserve electorsl. select from among
the names on the list pertaining 10 his
group one name. not his own. as repre-
sentinE his choice for Federal reserve dis
trict elector. Glass a. Directors
Of Glass u shall be chosen In the same
manner prescribed for directors OF Glass
A. except that they must be selected from
list OF names furnished, one by each
member bank
When the House bill emanated in Its
amended form from the Senate Bank
ing and Currency Committee the cleo
ton provisions were vitality changed.
In the light Of the removal OF restric-
lions upon the voting for reserve bank
directors there Is no reason why the
grouping of the banks and the provi-
sion for district reserve electors should
have been retained. They We're, how
ever. kept in the Senate bill. although
the requirement that electors should
vote only on the candidates Of their
own group was stricken out.
That was the most material altera-
ton effected In this part Of the bill by
the Senate committee. but II was an
alteration which was approved by the
Senate and agreed 10 by the House In
the conference on the bill In December.
As the measure emerged from Congress
in the form now known as the Federal
Reserve act II contained no group
qualification whatever respecting either
nominations or elections for reserve
hank directors. This il the law as 1t
stands to-day: and the following Is the
language of the act into which the or.
gnnization committee has. by it's regi-
lations. attempted to insert group re.
stric,ions