The Washington times., 1915-06-15

There has been a sudden realization
that the United States occupies a great
place in the world Of finance, and OF de-
sire that the country make the most
of the opportunity. The idea OF the
United States as the worlds one great
nation that has the wealth, and has II
in available form, to cushion the shock
that world war has brought to flnan-
cial systems everywhere has made
powerful appeal to the popular as we'll
as the business imagination.
Moreover, 1t has been pointed out re-
Gently as in some ways fortunate that
the present reserve bank act was
passed by the Democratic party. which
in general has been especially opposed
heretofore to whatever looked like
move toward creation Of bank of the
United States.
The educational campaign which led
up to creation Of the reserve system
was a Republican affair: It fell to the
lot Of the Democrats to see the legis-
lation pass while they were In power.
with the result that both parties are
committed to every possible effort to
develop the system on wise lines and
help make 1t succeed.
Will 'Toll'' Them In.
Then the war, the moratoria In Eu-
rope, a.. financial exigencies here, the
closing Of stock exchanges. ETC.. pro-
vided opportunity for the new system to
give a prompt public demonstration OF
| its effectiveness as steadying force.
| resulting in overcoming most OF the
misgivings among bankers and OF the
| hostility that had existed among GER
tain section Of the community. Alto
| gether, 1t is felt that the circum-
stances are most auspicious for under
taking further development Of the sys-
| tenn.
It would be error to assume that this
means that any aggressive campaign
is contemplated, with the purpose Of
forcing the state institutions into the
Reserve System. To the contrary. 1t Is
especially desired to make 1t advantage
GUS and to "toll'' them in. Even now,
| men who arc most interested In the
| extension of the system are giving study
| to the best of the State banking sys.
| TENS in this country, and to details OF
some foreign banking experiences. with
and paving the way for bringing in.
of their own wish. the state banks.
To Draw From New York System.
One of the admittedly superior State
banking systems Of the country is that
of New York. under which a great
group of the largest financial institu-
New York system has stood the tes,
Of time and of severe experience. II
is likely to be literally drawn upon
for suggestions as to the proper method
of developing the national system.
One of the earliest legislative efforts
likely to be undertaken will probably
be aimed at equalization Of conditions
and business opportunities as between
national and state banks. A long steI
in that direction was taken in the pro-
vision of the reserve act which per
mitted national banks to exercise the
f1duciary capacities that in the past
had been restricted to State institution.
to act as administrator. trustee. guar
dian. and the like.
1t happens that In order to let then
do this, the State laws in many State:
must be adjusted to this purpose; anc
on the whole. it is considered that thu
legislatures that have been in session
since the beginning Of the present yeal
| have been fairly generous In accepting
the Invitation to improve the status o.
the national banks In this regard.
Opposed In Some States.
The legislation has failed to pass II
some Of the most important States; bu
1t would not be quite fair to say 1t ha!
been affirmativcly rejected. More com
monty. where 1t has not been passed
it was allowed to walt until more ex
perience might determine what possibl,
objections there may be- to 1t. In som,
states the state institutions have prett!
vigorously opposed 1t. however.
One Of the changes which are nov
proposed In the natlonai panklng iaV
would permit national banks to main
tain branch establishments. at least II
the cities where they exist. This privil
eye. heretofore generally enjoyed b!
State institutions, but denied to the ma
tional ones. Is manifestly Of great value
1t Is a means to enabling bank to Civ
physical accommodation to customers II
different sections of a city. and haI
done much to help build up the Stat
banks.
| The case WAS recentlv cited Of a err,
in which one State institution had
regular system of branches scatteret
sectionally throughout the town, Will
no national institution might have NOR
The result is that the State institution
enjoys an advantage, in merely gettinl
close to its clientele. that places a pre-