The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1916-01-11
Financiers Denounce the Reserve Bank SYSTEM;
I Allege Elastic Currency Has Failed to Result
INITIATION PERIL ONE OF THE AR
GuMENrs ADVANCED.
Two or Three Instead of Twelve Re-
ssrvs Banks would Have Been
sufficisnt, Say Expert.

NEW YORK. January iO-tn an ar
ticle on tins Federal reserve bank system
the January issue OF the Journal OF the
American Bankers Association will say
In part.
1t has been often stated in these col
umn- that the intention OF those who
system was To establish a going GENITAL
institution or several OF them. Bv this
is meant institutions which would have
uully. transactions with their members
ana be component parts OF the banking
scheme OF the country. They were not
innocuous banking existence until there
INTO operation all OF their reserve
The Aldrich-vrc, AN &C, was an
SineIsency measure. and as such a.
70 which % was put. II was ineNpensive
anu efficient 50 far as supplying cur
was 10 the effect that the country neeieI
something more than this. and In some
mnrniSa5uIe anu TO some extent expert
Of the reserve act. Wherc A. VS. nos
"ee9ed difficulties have arisen.
capital requirements Of "A reserve bsurmt
system would be. Experience seem. 10
nave shown under the peacemul oper,
of the banks FOR the reGiired emma a.
Wound nave been as effective as It's Iav-
Liability From Paid In Capital.
,Iaid N capital creates n dividend
liability. Dividends necessitaie banking
uN-3 lud'r present circumstance
sne necessity for earnings seems syu1us-
serve banks and their s~tockhold,rs -,
XIV a. lhe ~Stockholdlug banks have been
Seen 90 IrSNent thls competition ;hey
''..Hl TO nave done IL
vn TIE other tand. the necessity for
anf lia- driven tho reserve banks
~ Lht Federal Reserve Board 20 de-
Using means whereby the ,.fniurs OF
we nanHS could Dee increased. The
operations OF the re-rrV. hanks III 49,,
'ptn market and operations therein M
outlined iu section fDlrfr.u ~
p" iti THESE operations have not been
particular extensive. and .rrl.- ,L.re
u.s. s'm" revision OF the Law MI, prob
1T would not hc fair TO memler hank
l1 ~! Una. th" reserve banks have lone
~ n"'in,-~ because Of hostility %
~ NV -A~ien- TIE ryslem has defects.
u. not The least are defects ~ early
INNS ration and administrative ia
w. uI lne act. ~ was plainly am error
20 bring into existence al one sfr1ks
we've reserve banks.
roIIsssrJ has apparently been about
sn business FOR two or three Two
l Lnrte' or one. could have, don. am me
m. H. mere has been To- DO and al
INDEFINITE time 10 come. The orr5niSa.
gi DoH.mlttee tortured the l|unrla-, OF
The Effect of Poiiaes.
n banking system. wEI1l .t.
' On tN' diului~tratiuu that cr.4r.a
'ouli nave been further along fb.
49, 70 success 30 The political view
utg bten less warped by U4rf-,u-bft
and sentimental hostility 10 aUri.1f ~
IONS ABOUT - central bank. Ir me BANKS
institutions. there b9-
ana expensive.
III defect is tha am act whose
-t- pHfpySe was TO furnish 4p rI,e+t-
currency has failed 10 do So In e.,I.
rs1tpuTe ms failure is due Co cunditi1ns
''Hld not have been forese.u. Viz
gre .luctNal Ia Eur0us. which ia.
the I uited States. ''
As "a result DF .....-t. ola
ports. which 90. r-arursHa-. II Ar.ri-
"a -'ttI4tit- held abroad could MOI h.Id
'H' mas been 20 currency ~
LfH9i2u OF approximately 500 uUu uun
o., N'-t4 reserve system. designed
l"'et any possible ~rt~m ~ r.rrr..
t'lh' WIS UNFORTUNATELY MOI l,-Irr..I ID.
N' win the question OF mansion
me country o. afflicted Win , .5r-
Etncy imitation and i- merac.d win H.
"'hser~ that accompany H."