The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-11-24
RESERVEBOARD
POWER TIED BY
'AD0O'S MEN
Attorney-General's Opinion
Blocks Efforts to Reduce
the Districts.
NORTH JERSEY BANKS
IN 4 PREDICAMENT

wAsntsGros. Nov. ga remarkable
rmation has developed in regard to the
FEDERAL Reserve Board. The Attorney
Genera, has held that the board is with
ou, authority under the Federal reserve
ac, 10 change the boundaries OF the re-
,rye districts or to shift the reserve
banks from one city to another.
In other words. the work OF the or
,snizstion corniaitte., which consisted
OF Secretary McAdoo. Comptroller Will
ans and secretary of Agriculture Hous-
ton, II Il held, must stand, regardless
y, the Judgment Of the Federal Reserve
Board. This opinion seems to raise
question AZ to the legality of the action
OF the Federal Reserve Board In trans
ierring the banks In northern New Jer-
ssy from the Philadelphia to the New
York district. If that transfer was IL
legal. points may lie raised against
transactions under it. An appeal to
Consics> to remedy the situation Is
Geclared certain IL the Attorney-Gen-
,ars opinion Is allowed to stand
The opinion, which has been charac-
ierized a. startling by some authorities,
was prepared by Mr.. Gregory on sun
day and was presented TO the board
yesterday. when the board took up the
question of its power to deal with ap-
plications for the removal OF the reserve
bank OF the NTH district from Rich
mond TO Baltimore and for changes I'm
TIC limits of other districts.
Reduction Of Dist rtcss.
II is known that soIe members OF the
board have been considering the advisa-
Elty of reducing the number OF reserve
districts with "a view to adjusting the
system to efficiency requirements. The
belief in some quarters IL that II the
board had been left free to pursue it's
own rclinatiors and its own ideas as 10
The meaning OF the provision of the
-eserve act regarding the power to re-
View the work of the organization COM
mttee secretary MeAdoo and Comp
uoller Williams might have cone dam
sefou,ly near seeing their findings re-
yersel
tn. timeliness Of the Attorney Cen
erals opinion surprised sore members
the xA.Ax1----li.-ts.--Asssde that
several Tembers did not know that an
opinion had been called for on the sub
.ect 1t had taken the Attorney-Gensral
'lc ."rser part OF Sunday to prepare
Le opinion in time for yesterdays board
meeting The opinion was rendered
formally to President Wilson, who pre-
sumlb,y had asked for IT,
Whether or not the Department of
Justice Went through the formality Of
sending the opinion TO the White House
Jetole turning II over to Secretary Nc
Adoo pr Gov. Hamln Is not known.
The opinion was not read at the
meeting Yesterday although the sub
stance 4 it was stated. II Is said that
the Attorney General will be asked to
render an opinion on whether or not the
board may change the designation of re-
serve ciIies.
Students Of the reserve system be-
htvr that the opinion of the Attorney
ieneral, II accepted by the majority Of
The board, will have far reaching effects.
~ the trst place il Will Immediately
nro~ out of court the application OF
FNtsOurS TO get the reserve bank now in
eleve!and and that of Baltimore to OBJ
TAN the bank now in Richmond.
congress- could Aid.
Nl.ess there is a change of Admins
Natou ~ "a new Attorney General IN
appointed e reserve system will prob
ably remain as it is now, with twelve
regional districts The only other means
oi altering the system would be a resort
10 Congress.
serious question which may arise
nom In" decision IL whether or not the
ug'inu of the board in changing the
banks Of northern New Jersey from the
Philadelphia TO the New York district
NodI be- allowed 10 stand. This step was
ishea before the adjournment of the
"pafh for the summer recess.
II vas !u response to the demand from
'u' New Jersey bankers that they be
"H'N"l 20 pursue the normal trend OF
men banking relations with New York
"'y instead OF the artificial connection
established by the McAdoo- williams
OTga zot'on committee between them
Shd he Philadelphia reserve bank.
III" A'orney-General's decision con-
ours i0 mat presented several weeks ago
py COUNSELLOR Elliott of the board.
opinions nave been received from other
"Nyeis, howoyer. that the board has the
power both TO change the location of re-
'e'F" banks and the limits OF reserve
itIi.ts