The Birmingham age-herald., 1917-03-11

rom exercising its full charter and statu- tory rights as at present under the state laws. Perhaps the state banks balk on the question of reserves which they, like the national banks, would be required to carry with the federal reserve bank, and here maybe is where the shoe pinches' The very essence of any great and com prehensive financial system is the mobiliz- ing of the bank reserves, and holding them together, as a protection, not only to the banking business itself but to sta bilize financial affairs in order to give se- eurity and tranquility to everyone who is engaged in business. r
 This, apparently, is perhaps the, prin- eipal cause that keeps many state banks from joining a financial system that is so universally approved. It is true that the state banks can now keep their reserves in. far-off financial ceuters. and receive thereon per cent to 3 per cent on their balances, but isn't this more than cotn- pensated for in the protection and secur-
 ty affording by having their reserves in a federal reserve bank where they are assured it can be gotten when needed? It is no doubt fresh in the memories of most of you that when panics occurred
 in the past, banks were unable to get ther reserves from New York and other finan- cia1 centers. They were perfectly help less then, both the state and national banks. Those. who were the heads of banks during those trying times can never forget it. and I know they are thankful now that they have a financial system that is ready for any emergency and all Hays to large extent all such fears as existed in former, panics I imagine I can hear a state banker say that when panics occur again (and, gentlemen they will surely come in one form or another) they will get help through those who are members of the federal reserve system. Isn't it quite likely in troublesome times the member banks would be busy looking after and taking care of their own cus- toners? I have heard some state bank CTS say, that when we again encounter another. panic then they would put in their application for memberships I fear this kind of financial death-bed repentance might not work so well at critical time, for at such times there might be consid- erable delay in taking in new members; in an emergency, time counts for every thing.
 IS NOT PANIC PROOF"
 The federal reserve act, like many good things. has received extravagant praise from it's friends and some of it's admirers have gone so far as to say that there would be no more panics Well, we hope so, but I cannot bring myself to tdhe SucIl rosy NleW. OI. the IuIure.s The federal reserve system is a potential power in the financial world and with it's present membership and large resources would be able to go a long way toward ameliorating a financial disturbance, but how much more potent. and effective it would be if the state banks and trust companies were also a part of the sys-' tenn Ultimate tely, in my opinion, this will come to pass, for public opinion which is the governing power of this country. will take a hand in this question and. a way will be found to unfy our financial system and compel all banks to be in one. powerful organiza ton, the general welfare of the United States re- iquiring it. This. to my mind, is con summation devoutly to be wished Per haps however, it may not be necessary for Congress to bring this. unification about; for the public although little slow, sisvAlite discerning. and in the full ness of-time there will doubtless be | more sharp discrimination by the cus- toners of banks, and I feel quite sure the discrimination will be in favor of banks who are members of the federal reserve system.
 "As the system proceeds in it's develop ment and it's daily workings become more familiar to the general public it is not unlikely that banks will be char acterized as member banks and non member banks. instead of. as at present, national banks and state banks.