The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-15
Political Control Of Banking.

Of IL which has added to the attrac-
tion OF the Federal Reserve system for
state institutions, although the Fed
eral Reserve Board Is earnestly seek
ing to unite them with the new or
ganization Of the national banks.
However the Riggs bank case turns
out. its immediate effect has been to
lessen the desire Of State bankers to
merge their relative independence in
the complete subordination OF national
banks TO Federal control. In the
meantime the Treasury Department
seems bent on diminishing the appeal
Of the Federal Reserve system even
for the national banks which have
had To join II en- masse.
The employment Of the lawyer who
hunted the money trust" shark to
defend the action brought by the
Riggs bank has increased the appre-
hension which the case has excited
in the banking community generally.
The inclusion OF the political mar.
shall Of the Administration in the
official conferences which have been
held on the case has provoked con-
Germ. Now the Comptroller OF the
Currency comes along and augments
still more the prevailing uneasiness
by asking Congress. on the basis OF
his dealings with the Riggs bank. to
extend the confines Of his authority.
which is already 30 formidable that
the right OF the courts to review II
seems 10 be questioned in the Treas
ury Department.
Starting fifty years ago as the SUI
pervisor of the note issue Of the new
national banks. which was the pur-
pose Of their creation. the Comptrol-
Ter Of the Currency has become the
Pooh Bah Of the banking world. For
that matter he might be called the
Pooh Bah Of the Government. No
other governmental officer. not even
the Attorney General has arbitrary
yisitorial and inquisitorial powers APP
preaching his. Yet as an outgrowth
Of the Riggs bank case and before II
has come TO hearing the present pos
SCISSOR of these powers is urging in
letters to members Of the Banking
and Currency Committee Of the House
OF Representatives the requests which
he had previously preferred for more
power
If JOHN SHELTON WILLIAMS has
his way the campaign for merging
state banking systems with the Fed
eral Reserve system will not make
much progress. On the contrary.
State banking charters will look more
than ever attractive To those who hold
them and may come into demand by
national banks for the object Of with
drawal from Federal jurisdiction.
Suppose Comptroller Of the Cur
rency should be appointed under some
political regime who was full OF the
ignorance and prejudice about bank
ing. the nature If credit. the function
Of currency and the like which have
been more than occasionally exhibited
in our history. What chance for
such Comptroller to turn banking
conditions upside down and with
them the business conditions Deepen
dent on the banks. or suppose the
appointment of Comptroller who
was man OF affairs, vindictive with
al, and so trained in finance as to
know how hest TO employ his official
prerogatives to pay Off old scores
aga inst bankers accumulated in his
unofficial career. What an oppOrtu-
| nifty to feed fat his ancient grudges
would confront him in the Treasury
Department and what temptation
he would have to grind his private
axe on the pretence that he was per.
forming public duty!
II there is any one feature Of the
Federal Reserve system calculated to
keep State banking institutions from
complete early identification with
il. that feature Is denoted by the
considerations which make the Riggs
bank case matter Of general bank
ing concern. Promising In most re-
spects, the Federal Reserve expert
ment contains elements that threaten
its successful establishment as n
permanent part Of the cOuntry's eco
monte structure. There il altogether
too much Treasury Department,
Treasury influence and Treasury con.
troll apparent in the Federal Reserve
organization.
Under the Federal Reserve act the
powers of the Comptroller Of the Cur
rency have been enlarged. Yet the
act provides for such change In ma
tional currency and national banking
conditions that the logic Of the finan-
cia reform intended would lead to
the abolition Of the office Of the Comp
trolcr, of the Currency altogether.
Everything which he Is required or
authorized 10 do would he more safely
entrusted to a bureau directed by the
Federal Reserve Board.
As for the power of the Treasury
in Federal Reserve affairs 1t Is moth
ing hut danger. To-day, with the
Treasury on the verge OF bankruptcy
and with the huge credit capacity OF
/ the Federal Reserve system practically
untouched, the power Of the Treas.
ury In hu nj ipU a NJ ira ia dn,,,,ant M 4