The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1916-03-11
FOR ALL THE u. S. III
MAY ESTABLISH
NATIONAL BANK
Bankers Attitude Toward Fed
era1 Reserve System.
May Determine Effort to Open
Bank of q. S.
CENTRAL ISSUE IS OPPOSED
Many People Consider Plan as
Vicious Legislation.
Reserve a Step Toward Bank
of Central Issue.
CENTRAL ISSUE IS OPPOSED
Reserve a Step Toward Bank
of Central Issue.

Washington, March 1.-THE att1-
tude of the banking interests of the
country toward the federal reserve
system is being watched nowadays
with more interest than bankers gen.
orally realize by legislators The ex-
tent to which within the next year or
two bankers shall demonstrate gen.
uine and intelligent sympathy with the
purposes of the new legislation is like
" to determine whether strong eff
fort shall be made to create Bank of
the United States.
The federal reserve system as now
organized, was, as is generally real
lied a compromise; indeed, it might
be called a compromise among COM
promises.
Senator Owen, chairman of the sem
ate banking committee. was a firm
believer in the idea of a central bank
of issue, and long before the reserve
system was devised had framed and
introduced a bill to establish such an
institution. People who are still vot-
ing for Andrew Jackson and who for
two generations have been perslstently
hostile to the very idea of a central
bank in this country, needed nothing
more than to know that central
4 bank was proposed, to convince them
thatit was vicious legislation. In addl-
ton to this powerful element-and it
is particularly strong among old-line
Democrats-there were many prac-
teal men who would have been glad
| to see a central bank created, but who
realized that to undertake so revolu-
tionary a measure at a single step
would involve very great difficulties in
readjustment of financial and bank
| ing conditions. 1t was probably due
| to the astuteness of the late Senator
Aldrich that the very name of bank,
was omitted, while It was a political
/ concession to sectional sentiment that
| determined upon the creation of the
group of regional institutions all of
them under the general domination of
the central reserve board.
Review Years Work.
The uncompronising advocates of
central bank fatty called by its right
name would have been glad to see the
new system include not only the ma
tional banks, but also state institutions
and trust companies This likewise
was found to be politically impossible,
and in the final organization of the
scheme only the national banks were
required to become members. Pro-
vision was Incorporated. however, I'M
der which the other classes of institu
| tions might become members of the
federal system if they desired
After more than a year of expert
ence with the new system the men
| who took the lead in it's creation are
| beginning to make inventory of its
| accomplishments and of the attitude
IL.
One of these, a man who played one of
| the largest parts in framing the legis-
latiOn, is now announcing that unless
| there is more disposition among the
excepted classes of bankers to unite
| with the reserve system, amendment
of the act will shortly be proposed, to
bring about more rapid progress in
this direction.
Not a little thought has been CIV
en- to methods by which further uni
a. -, E-I- -
be accomplished. Difficult constitu-
tional questions are involved, but the
advocates of a further unification be-
lieve it is possible to accomplish their
purpose without a constitutional
amendment. The general DISPOSE
ton to concentrate governmental
functions more and more in the fed
eral authority is a powerful influence
in favor of further progress in the
direction of a great federal bank.
Large Banks Are Shy.
There is some evidence of differ
ence of opinion about the attitude of
the state banks and trust companies
thus far toward the reserve system
In general. the administrators of the
reserve system have expressed them
selves as reasonably well satisfied
with their progress toward getting in
the excepted classes of institutions
Legislators are not so uniformly sat
isfied in this direction. Some recent
expressions by men who will have a
good deal to do with formulating and
urging further legislation, indicate a
very definite impression that in some
parts of the country the state banks
and trust companies have been on the
whole indisposed to cooperate with
the federal scheme. This complaint
is especially made by southern and
western members of congress, against
New England and the middle east,
where state banking institutions are
particularly powerful.
In the parts of the country where
banking units are small there has been
much more tendency to unite with the
federal system than in the east ana
New England states, where banking
units are much larger.
Rural Credits Factor.
Another reason for the desire TO ac-
celerate the unification of banking in :
strumentalities concerns the tendency
of rural credit legislation. Senator
Owen is authority for the statement
that within very short time the SEN
ate banking committee will report a
measure designed to provide cheaper
money for use in agricultural develop
ment. He points out that in sorne
parts of the country farmers are able
; to get money at fairly reasonable rates,
but that in others the rates are SO
high that agricultural development is
greatly retarded. Several months ago
a subcommittee on rural credit legis-
lation was named. This sub-commit-
tee has worked diligently, studying the
models and experiences of many coun-
. tries in dealing with the rural credit
problems. As result scheme which
is believed to be entirely practicable
for this country has been devised, and
will be presented in the forthcoming
= measure. Senator owen, with n good
deal of confidence, declares that the
bill will pass the senate in the next
, month or two, and he believes it will