Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1915-11-03
Well Developed Effort to Cur
tail Powers of Reserve In
StitutiOnS Is Being Prepar-
ed for Congress,
OPPOSITION BY WHITE
HOUSE FORCES CERTAIN
Secretary of the Treasury
MCAdoo Sees Wall Street
Influence in Proposals Of
fered in East,

Washington, Nov. One Of the
hottest fights OF this winters session
Of congress promises 10 be over the
reserve bank system
Two lines Of cleavage already are
appearing
one parts wishes to make the re-
serve banks subordinate to the pres
eut free banking system. to be useful
in emergencies but not to cut an i'm
dependent figure in the financial
world
The other wants the banks to de-
velop into a chain of United states
banks which win dominate the bank
ing business in America as the great
banks Of England France and Ger
many do
Three amendments to the federal
reserve act will be proposed all of
which win have a tendency to Consol-
idate the power Of the member banks
and make them control the reserve
banks These are
Amendments to BE Proposed.
First, a provision reducing the lia-
hilities Of member banks for payment
on capital stock IN the reserve banks
and leaving a part Of the reserve the
banks are supposed to carry with the
reserve banks with the member banks
themselves The suggestion that the
control of at least one-third of the re-
serve be returned to the control Of the
member banks was adopted at the re-
cent session of the American Bankers
association at Seattle,
Second, TO divest the secretary Of
the treasury of the power over federal
funds, as far AS their deposit i'm re-
serve banks or other banks is CON
cerned, and put It in the hands of the
federal reserve board.
Third, the abolishment of the office
of controller Of the currency on the
ground that the establishment of the
federal reserve board with power to
cali for reports of banks has made
this office superfluOus.
Administration win Fight.
The administration is expected to
fight all three of these suggestions,
though it is a question whether it can
make a political lineup on all of them.
The first Is considered to be merely
a plot to lessen the opportunities of
the reserve system, to re-establish the
old system whereby the New York
banks dominate the situation. Much
quiet work has been done by the ad-
ministratiOn to produce just an oppO-
site condition
II has iacketed reserve banks which
were not active enough and has prac-
tcally told them they were expected
to compete with their members in
serving the people or they might be
abolished
Money Poured Into South.
Frs..
treasury to reserve banks. In the two
southern districts $5,000,0OO was de-
posted a few months ago when there
was no loud call for il on the ground
that the psychological effect of the
federal money coming would be hap
py"
chain Of the reserve districts has
been affected and the transfer or
funds and credits from one district to
another can be made through a com
mon fund held here in Washington
All these moves are in the interest
of making the reserve banks bigger
than their members, even where the
members are Of considerable size.
The member banks, it may be said,
have no interest in transferring the
power over treasury money from the
secretary OF the treasury to the fed
eral reserve board as this would i'm
mensely strengthen the board as a fl
nancial dictator But the administra-
tion. none the less, is against Il.
Sees Hint at Wall Street.
When the matter was brought to
the attention Of the present secretary
a few weeks ago he declared that it
emanated from wall street and from
interests that were trying to get
him No administration, he added,
could afford TO let that power 80 out
OF the hands Of the responsible head
OF the treasury and the representative
OF the government into those Of It's ad-
board
The move appeared te be condition
al on the federal reserve board first
being made subservient to the bank
ing interests. When it was ready to
use that power as the banks wanted
IL used it might get It, but not until
them.
Would Gag Williams.
The offer TO abolish the controller
OF currency is based partly on right
eOus desire to terminate the futile and
furious activities Of John skelton VIII
llams, and partly on a wish 10 make
the federal reserve system work more
smoothly
The controller is member OF the
board There appears to be no reason
why Il member Of the board should
have powers 20 demand reports which
the other members viii get through
him The logical thing, II is assert
ed. would be to have the representa-
tive come directly to the board. Sew
eral members Of the board believe that
efficiency would be greater with the
controller out Of the way.
One Counter Proposal.
Counter proposals to strengthen and
develop the federal reserve system
may be expected. George J. Seay
governor Of the Richmond bank. re-
Gently attracted much attention with
q paper advocating the immediate
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