Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1918-08-26
A FINANCIAL BALANCE WHEEL

retirement OF Paul M. Warburg from the ted
eral reserve board and Mr.. warburgs statement with
reference to what has been accomplished through the
fundamentally Of the board suggests interesting posi-
bilities, both as to what might have happened had the
board not been in existence during the war. and as to
the effect Of the extension Of some such plan to rne
finances Of the world at large. =
MI: Warburg, by the way. retires from the board
OF his own volition. He. is of German birth, and of his
brothers who are still residents of Germany one occu-
pies an important position as financial advisor to the
German government The thorough patriotism Of Mr..
Warburg has not been called in question, but he felt that
because Of his German connections his reappointment
would in all probability be a source of embarrassment to
the government, and for this reason he presented an ear
nest request to the president that he should not be reap
pointed. We believe the universal opinion to be that Mr..
Warburg has given the country splendid service in the
position which he has held: but the reasons which he
advances for his own retirement are sound.
The federal reserve board is the great central agency
sents the creation of a strong and unified system ont Of
an inchoate mass. It added nothing directly to the
wealth OF the country, but it has made available for pur-
poses OF trade and credit practically the entire CONNER
cial assets of the country. whereas before it's creation It
was impossible for the country to realize on these re-
sources or render them available in the very times when
they were most urgently needed. :
4 = seeHsc certain that the finances Of the nation could
not have stood the enormous strain Of war under tho old
conditions Had there been no steps in the direction Of
a unified system our whole financial structure would
nave been demoralized. The government would have
been impelled to take steps to bring the banking business
OF the country under a centralized control. Just as 1t has
Deem necessary to bring under similar control various
other lines of the country's business
In the banking business this was not necessary,
Through the federal reserve system, while the conouct
OF fhe banking business remained in private hands, it was
brought under the close supervision Of the government.
and into thorough cooperation with the government. and
so well has the system worked that during all the strain
and stress Of war no important notifications Of tho plan
have been found necessary.
The United STATES had Jagged behind most Of tho
other great nations in the systematization of its finances,
The federal reserve system places us, in many particulars
In advance Of the other nations. There has been the
suggestion that after the war tho attention Of the
financiers OF the world may profitably be directed toward
the formulation of q system for the world at large which
will embody those features Of flexibinty and security
which characterize our system in its application 10 the
finances OF our own country .s Obviously the question
presents many complications. but It 10 equally obvious
that IL a world system Of finance can be devised which
swiiistend to prevent financial panics, and to give secur-
aatey tsslegfttpmate Investment and enterprise in every quar-
q ~ world, i great advance viii have been made.