The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-13
WILSON'SPLAN
lSREJECTEDBY
RESERVE BOARD
Refuses TO Permit Federal
Banks to Establish Pam
American Agencies.
McADOO HAD BACKED
PROPOSAL IN SESSION

w,suf%croS, oct. 1.-THE Federal
r,sorye Board turned down to-day a
,scommendation made by President vii.
.on with the backing of Secretary or
,he Treasury McAdoo for the establish
ment Of joint agencies by the Fedora,
reserve banks in the leading cities OF
Central and South America.
Mr.. McAdoo had laid before the board
n letter from President Wilson in
dorsing this proposal and had supported
4, BY his own arguments as presented in
his recently published report on the
ran.Amer.can financial conference of
las, May.
The submit,al of President Wilson'S S
letter to the Federal Reserve Board was
the subject of some criticism by those
who had contended that the board would
be subjected sooner or later to the in-
Iuence of the Executive. To-day's de-
,ison by the board. however, is re-
sarded by many as in the nature OF a
declaration OF independence.
Secretary NcAdOO's View.
In the report which Secretary Nc
Adoo submitted TO the Reserve Board
along with the Presidents letter he
contended that manifestly the resources
OF one or several of our largest banks
acting individually were insufficient TO
meet the demands of the situation now
or as it will develop. lie said:
The twelve Federal reserve banks
a. a, - ha Alny ynl
Reserve Board. establish joint agen-
cies in each of the countries of Latin
America, their interest in such agen-
cies TO be in proportion to the capital
stock and surplus of each participat-
ing reserve bank.
The combined capital stock and re-
sources of our Federal Reserve banks
utilized in this way for the extension
and promotion Of our foreign conf
merce would give them unrivalled
financial power. They could main
tain themselves in foreign fields in
competition with the world and per-
form Il service of incalculable value
to the American people.
Secretary McAdoo in that report re
jected AS distinctly inferior to his own
plan the suggestion which the board
including himself. has now adopted. tt
SIX for an amendment of the nationa
bank act so as to permit individual
0anks jointly TO undertake such de
Nelopmcnt.
Here is a statement issued by th'
Federal Reserve Board:
~ the meeting of the Federal Re
serve Board this morning there can't
up for consideration and discussion tn
report of committee OF the board u
whom had been referred the subject %
l. sttI n Am.
can and Central American countries, a.
recommended by the Secretary OF th'
Treasury in correspondence transmitted
the board October 6.
Would Tie lP Reserve.
'"rhc committee report expressed th'
view that Federal Reserve banks-beini
h. custodians of the reserve money o
he member banks--should not he per
mited to do pioneer work in Latil
american countries. granting credit IA
tics which would lead to n lookup
%! reserve money in loans which II
most of the cases would be subject Il
vide fluctuations of foreign exchanges
and Secretary McAdoo stated that hi
Communications about joint agencie
'or Federal Reserve banks did not con
template this character of operation,
The report reminded the board of tn
roli,y nurs,.d for generations by tn
'argc Govcrnmert hanks of Euron
which do nor yo Iuto foreign fields ex
ce,, tho, H., MA "a ua,,,ndarv re
.or,es ror.tgn hi,ls' an IN. most i'm
no-,sn, r,ronaa,, on,,,, rios uher. ,arg
dis,a,,,, ,',,n,'|, -, ,a uharo ~
gold standard is established beyon
question.
h..,' w ~ 'pu''' Ies t"ese e''., 81,
.o,,,,,;..l[ eoi oirespo"uen'a anu ~,
,o"d,,t', tt,, ma. ""ea Ia ,o /;
Err',,, a. ''",' i' De'i .'9..1,
.-',',,,i 'V'''t 'se"olea vi W. 80,
Tba c'',,'i,,' " soou ~, ,.s,',,ar
10 w., ,,o, r,eo e"'''u .'',''
Fra,re h,va astnii;.bod indensndan
aarks ar Lr,,rcb hanls ~ dsnosi, h,ni,
20 Latin american countries IN do nlo
reer work and that tho United State
slould pursue the same course. mas
much aA IL is necessary for hanks roin
'u,o this field TO have the wides, DOS
s,o.r range Of ACTIVITY in order to b
able TO compete with the local banl;
ana the branches of the foreign bank
ALREADY established in these fields.
could Not Compete.
"Fndor,I royar,.o h,rl,s hoiro ,r,,
er,y r,.tri.,.d Go ,..r,ai,' ,r.ns,o, in,,
aud su,.,, 49, MAJ M, in.erfora ,,,i,h ,h
a1suIu, Humidity of their condi,io,
could not compete successfully in thi
aspect. whereas il shouId be their fun,
'.'I - 40 all III their power to ASST
vi p"llNs Wh!cil enter the l-atl