The Birmingham age-herald., 1917-10-13

Charles H. sabin, president of the Guaranty Trust company, state char tered institution. in a brief explana- ton setting forth the reasons why his institution has applied for member shin In the federal reserve system, mentioned first of all the necessity for the banking strength or the nation The Guaranty Trust conn pany win contribute considerably to this purpose by reason of the Tact that ii is the largest trust institution in the world and Is surpassed in resources
 and money power by only one other
 American bank, that one operating un-
 der national charter.
 When the monetary commission or which senator Aldrich was chairman was well along In it's remarkable work of Investigating the banking and fiscal system of the civilized nations, the members were persuaded that it would he of the greatest value if the United States was to have an improved bank ling system, were the basis of It to a. public opinion was so strongly set against centralizing or concentrating within the control of a single ,institu- tion the banking strength or the na- ! t;on that it was not deemed expedient when Congress began consideration of 1 a new banking bill to incorporate the 1 central bank system into the measure. Instead of that Congress created the I federal reserve board. whose authority controls 12 federal reserve districts.
 This federal reserve board is, in fact lif not in name, constituted with powT CTS which, exercised over the F dis trict banks, make 1t really central
 or centralized body.
 Bankers in this city have been per- suaded for sometime that Congress will
 perhaps speedy after the European 1 war. so amend the federal reserve banking laws as to permit the estab- llishment of a central bank President l Sabin's statement that chief among tht reasons why the great institution ol which he Is president has applied fol ladmission to the federal reserve sys tenn is the necessity for concentratina the country's banking strength, really l reflects the view of members of th' monetary commission respecting tn 1supreme value of q central bank.
 l. central bank would probably b.
 the best medium whereby there coul'
 be absolutely perfect concentration 9 the countrys banking strength. Tn
 federal reserve system. however, ses
 Ipecially at this time when the Ameri
 can people are subscribing and hay
 subscribed to billions of a war loal offered by the government, has througl Its supremacy over the federal reserv districts substantially acted. within 1t i Limitations as central bank would ds . The money power of the Unite lStates so far as that is represented b banks which operate under fedora , lcharters and the comparatively smal [ number of state chartered banks whic Z have become and the great numb.e ] about to become members of the fed a eral reserve system, is now to be cor { lcentrated at Washington in q name
 which a few years ago the peopl < would not have tolerated. But anon e the lessons the war has taught is ths s one which shows the necessity fe 2 olmobilizing. concentrating and co-ol : Idfnating business of various kinds, IT h cluding the banking business A l. ready it has been discovered at Wasi ss lington that the Fundamental princip 1t represented by combinations. co-ord e lnation and co operation produces. 2 there be wise supervision and reguis if ltion. remarkable results so far as e
 lficiency and reduction of cost are col
 lcerned.
 e- Many have been the arguments ma, Y by those who are In authority in the fe Is eral reserve system with the intent of persuade state-chartered banks to becor n members Of the federal reserve systel m For there cannot be the highest efficien U and the most satisfactory concentrati h. of the money power and banking streng 'n unless substantially all of the banks Y the United States, state and national. q
 members of the federal reserve syste
 Nevertheless these appeals have De made until now little needed, and there z z. precedent for the indifference or sy " antagonisrn Of state-chartered bapks ts
 federal system. rhe Rrecedent WIFI