South Bend news-times. (South Bend, Ind.) 1913-1938, 1915-07-17
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= WHAT THE PAPERS SAY =
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THE FEDERAL RESERVE SYSTEM
San FranciscO Chronicle.)

1HE T. RESERVE
(San Francisco Chronicle.)
1t is evident that the federal reserve
board and presumably the federal re-
serve banks are extremely anxious TO
system. Such a wish is inevitable
by reason of the inherent desire of
those in charge of anything TO have it
grow bigger.
But if as all agree the federal re-
serve system is a workable means o.
imparting stability TO Our finance, it is
obviously in the public interest that
state banks should enter the system,
as that would at once double its pow
er Of service.
1t is doubtful however whether any
bank will join or refuse TO join the
federal reserve system by reason of
the views of it's owners as to the effect
on the general welfare. They will act
on their judgment as 10 the credit or
loss likely to accrue to that particular
bank.
We may therefore drop considera-
tions of general welfare and consider
some of the things which will prob
ably influence action.
Probably the most important is the
BOSClOA0 ANAAo0A VI Ia AAb-
erty. State banks are now under su-
pervision by state authority. If they
enter the federal system they will be
under the supervision of two author
tiles.
The federal reserve system is grad
ually drifting into the condition of
a great central bank, differing from
the bank planned by the Aldrich COM
mission mainly in that the Aldrich
@r.n r,nlA 1nFrn,nn r~n1rrnHorr~ I'D
vested control ia the owners Of the
money, while the federal act made en-
trance by national banks compulsory
and vested control in appointees OF
the president.
AS the state banks cannot be forced
in their disposition is TO wait and see
how the system works, o much of
their liberty of action they will have
to surrender. and what they will get
in cash dividends for their sacrifice.
And those things cannot yet be
known.
The federal reserve board however
is assuming more and more authority
as indeed it must if the full purposes
OF the system are to be accomplished.
Under the difficult conditions which
the system is intended to provide for
its must be under single
control. other countries have inan-
ciers trained to wisely exercise such
control. We have yet to develop a
body Of men such as those who con-
troll the Bank Of England the Bank
of France and the German Reichs-
bank. There is but one member Of
the federal reserve board who upOn
appointment could be considered as
approaching that class. That we shall
develop them is proved by the fact
that hitherto in great cities groups of
men who by common consent have
been recognized leaders ave been
able TO give wise and effective direc-
ton.
These. general considerations can be
appreciated by all. The many minor
considerations such as those having 10
do with collection Of checks. capital
and reserves required, real estate
loans. exercise of trust functions, and
the like vary according TO the laws OF
the different states and belong 10 the
domain of technical banking.
IL is not likely that the entrance OF
state banks will for the present be
very rapid. And the delay is interest
serve board has TO coax and not com
mand. That may result in ameliora-
ton of conditions for all.
There should be one bankisg sys-
TEN with emergency control at one
head. Some think il viii come about
10y the national banks reOrganizing as
state banks but retaining Membership
in the federal reserve system. Ihat
however. seems very improbable.
KIPLING'S STRONG LANGUAGE
(Grand Rapids Press.)
Rudyard Kipling is chided by the