The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-03-29

powers OF the Federal Reserve Board.
and in paragraph * Of This section
the board is specifically authorized
ITO grant by special permit to ma
tional banks applying therefor, when not
in c-ontravention OF state or local law.
the right TO act as trustee. executor.
administrator or register OF stocks and
bonds under such rules and regulations
as the said board may prescribe
There is nothing mandatory about
this clause. The Federal Reserve
Board is not required to use the par
ticular authority given to it. Fur
thermore. the recognition Of obstacles
which state laws might afford could
no regarded as y congressional sug.
gcstion 10 the Federal Reserve Board
ia cmp,ov great caution in attempt
ing To broaden the scope If national
bank charters.
Irrespective If the reasons If Con
grc>s for putting the trustee provi-
sion in the Federal Reserve act. and
irrespective of the fact that there i
plenty yet TO do in establishing the
new Federal Reserve system without
going into non-eSsentialS. the Federal
Reserve Board j. proceeding to make
paragraph h effective as rapidly a
possible. Ii j. going further and il
supporting a movement for the re-
moval Of the restrictions implied by
The qualifying phrase when not IN
CONFIRMATION of state or local law
Clearly on It's face paragraph Is j.
a provision which the Federal Re-
serve Board could well afford 20 ig
more. certainly until the new Fedora
Reserve banking experiment has beer
more adequately tested by time AMI
experience. In setting about the eX-
ercise of the power conferred tn"
hoard i acting In uuseemly haste and
without apparent consideration Of the
consequences of a disturbing inter
ference with The conduit of the whole
experiment in banking reform which
he Fedora. Reserve act cnnnotes.
There are States where the laws
10 not seem To stand in the way Of
licensing national banks to act as tru,
ices. In some Of these States the
Federal Reserve Board haS already
authorized y few national banks 10
engage in the tiluciary activities hith-
crto exclusively performed 10y state
Institutions. Yet the absence of eA-
press Statutes TO the contrary j. not
equivalent To an assurance that the
Federal Government can charter
banks for any such purposes.
II is NOT At all certain that the Fed
eral Government has any power Of
his kind among the powers delegated
10 10: and it has delegated powers only.
The Federal Reserve Board seems
therefore to be- eNemplifylng the eXas-
perating tendency of Federal bodies
10 assume the existence Of Federal
power. in other words 10 uSurp 1t un-
I'll challenged although Of cours" III"
initial fault in this ease j. he fault
~ ' INAh go - -
into the Federal Reserve act.
As if this We're not enough. the Fed
eral Reserve Board has lent rs pres
tlge and il Influence To campaigns
in The states for the amendment Of
laws which keep national banks our
If the state banking ti".d. The re-
cent resolution Of the Federal Reserve
Board in the matter is an express
recommendation If such action. CON.
gress recognized the probable conflict
Of state laws with the exercise Of the
authority granted to the Federal Re-
serve Board in paragraph Is. The
Federal Reserve Board goes further
and says in 81 many words thar tn"
conflicting statutes Of the states
should be repealed.
As Il result Of is new departure
the Federal Reserve Board has stirred
ny q hornets nest Of opposition. a.
over the country plans are making tn
contest the proposed extension Of the
limits of national banking. The trll>'
companies OF WASHINGTON have He'd
petitions with the Fedora Reserve
Board against permitting the natIona.
banks of the District to do a trustee
business. organization has been IF
fected in New York and other States
to fight legislation which could have
no other outcome than the dislniesra'
ton of the state banking systems
The American Bankers Association
through It's trust company section T.
preparing to obtain a court determine
ton Of the conStitutionai!ty OF para
graph *.
The Federal Reserve Board seem
10 have made is first mistake 81
policy. II is an unfortunate mistake
hut il is not too late to reconsider II
Perhaps If the Federal Advisory Coun
ell wcr" consulted the board woul'
see y new light.