Evening star., 1915-02-21

National hanks and such trust COM
oanies In the District of Columbia as
have entered the federal reserve syS-
tom are now governed by two distinct
heads. The federal reserve board, con-
sisting of seven members. makes rui-
inrs. issues orders for various func-
tions. provides formulas for making
replies and is daily solving important
problems in the conduct of the bank
ing business under the new laws Inc
board is also formulating regulations
and rules for the twelve reglohai
banks, that in turn cater to the mem-
ber banks in the twelve districts
Every bank in the system is also
under the control. in the enforcement
of rulings made by the reserve ooaro
and by himself. of the controiier oi
The currency. In his last annual re-
port the controller also asked Tor
more power in enforcing his rulings
and orders.
All of which leads some of the lead
ing banking journals of the country
to suggest that there should be cen.
,ralization of control of all national
banks under the federal reserve board
as the one and supreme power
Referring to the plea advanced IN
his annual report by the controller OF
the currency for power to enforce ms
rulings by fines and imprisonment, the
Journal of the American Bankers AS.
sociation and the official organ OF that
great body has this to say:
The suggestion is the less pertinent
In view of the fact that long study
agitation and discussion resulted IN
the creation of the federal reserNe
board as the medium through whlcn
appropriate regulation of the natlonal
banking system was TO De achle'eo-
This board is composed OF n'e men
chosen because of their possession OF
60. X.
The law provides for their selection
from classes of business men, ana only
two may be men of banking connec
lions and experience. AS a matter OF
courtesy and for purposes OF bringing
he governments financial department
INTO harmonious relation with the reg
ulating commission, the Secretary OF
the Treasury was made member ex-
Ignored the need of having the Secre-
tary of the Treasury closely assoc1at-
I'd with the directing board. But the
discussion of a new banking system
aad gone on for some years before there
was suggestion that the office OF con-
troller of the currency be given new
Signifies. The controller had always
been a bureau chief in the treasury
Department When the question of a
new banking system had developed to
a point where its practical application
demanded attention. it was found that
he records of the controllers once
were necessary to the operations OF
the directing board given charge of
he system. The duties legally per-
formed by the controller coincided at
many points with the functions pro-
posed for the board. The problem was
solved by making the controller ex-
,ff,cio a member of the board. not be-
cause of any special benefit to be de-
rived from his membership, but tha:
the board might not be Inconvenience
by having his records made difficult of
access.
"If it were necessary to confer the
powers suggested in the controllers
report at all. they should be conferred
On the federal reserve board. 1t is
not in accord with the spirit of the
new banking scheme to increase the
powers of subordinate and obsolescent
officials. In fact, a proper amendment
10 existing law would be to abolish
he Office of controller and turn the
work over to the federal reserve
BOARD"