The Birmingham age-herald., 1921-02-20

fight rof American exporters and im- porters against foreign rivals into. terms of success, shall have-fired the imagination of the banker, who has done so much to convert the federal reserve system from a promising ex. pertinent into the unquestioned back, bone of our American banking sys> tenn.
 BAD TIME FOR CHANGE
 The unfortunate fact remains that the personnel, and particularly the gover- norship, of the federal reserve board ought not to change, at the beginning Of a new presidents administration 1t can serve too easily as a precedent. There are many features of the federal reserve act that ought to be as little af- fected by the coming and going of pres ldents and Of congresses, as are the de- clsions of the supreme court In fixing rates for loans by the reserve banks and in issuing it's statements to the pub lie, that are designed to exert more or less pressure upon banks and business men everywhere, the fe4eral reserve board should care as little about the effect upon any ones political fortunes as good justice cares whether his find- ings will advance or harm the interests of his friends. Several of the ambaz sadors and ministers from the United States to other countries have indicated their intention not to resign, when the new President comes into office, as am bassadors and ministers have always done in the past, because they believe that the welfare of Americas S interna- tional relations calls upon them to take a stand in favor of a continuing body of foreign ambassadors, instead of body that changes with the ebb and flow of political tides. There seems to be gen. eral approval of their course. Certainly, if our foreign relations call for a firm stand like this. in favor of continuous service of efficient ambassadors, regard less of changes in the head of the gov- ernment, the welfare of our banking in dustry, and of the great mercantils world dependent upon it, will call with far louder voice for a similar policy in the federal reserve board.
 We shall not enlarge, at this point in our article. upon the evil results of change in governor at this juncture We can lead up to the subject better by looking back over the record which Governor Harding has made since he has been the spokesman, and in large measure the leader of the federal re- serve board. The work of the governor is more complex than that of chief justice, or even of the head of a great banking institution. Knowledge of the law alone may not make John Mar shall. but for that matter the chief jus- ticeship can be administered by men of much less capacity than that greatest of American jurists. as experience has proven. It is also true that man can win his spurs as the head of a great bank, without having the right qualities for a good head of the federal reserve board. The task requires that one be not only a trained banker. but an admnis- 'trator of high order and diplomat en- t1-I A<~ or.1- L. 1-- good deal of that skill in dealing with the public, that is usually associated with the successful politician, without the successful politician's disposition to use this skill at times for less worthy ends. If you doubt this, run Over In your mind the different activities of Governor Harding as reported in the press during recent months.
 REPRESENTS THREE INTERESTS
 The governor of the federal reserv } board represents three different inter ests. First, there are the 12 federal re- serve banks. with their numerous branches, and the board which Is respon- sible, in the final analysis, for the way ir which these banks are conducted Each of the 12 has it's own board of di- rectors, but If they shall make missteps, on the one hand, or be too conservative on the other. 1t Is the reserve board that is more apt to be held to account ability, than the individual bank boards. If this be doubted by anybody. let the doubter read the reports of the hearings at Washington. concerning the proposed revival of the war finance corporation. and see how frequently the spokesmen for the unhappy farmers of the west and south blame the federal reserve board for policies pursned by the federal re- serve banks of their respective districts. Not once was there disposition to place the fault upon tho shoulders of the nine directors of the individual banks Next, there is the whole network of member banks, all over the country. national banks and trust companies alike, who do not hesitate to appeal to the governor from decisions of the reserve banks, CT for relief when they fear that the in- divfdual reserve banks may not senso the magnitude of their troubles. What certain to affect profoundly the subse- quent course that these 9.000 member banks may take. who hold by far the largest portion of the entire bank re- sources of this country. Finally. there is the interest of the general public, and in serving this. the governor must be the shrewd advisor. both of the banks which appeal to him with public opinion behind them, and of Congress which at- 'empts. crudely enough ct times. to rigid and sometimes altogether too dras- translate public opinion into the form of tic statutes.
 If we run briefly over the excellent impression which Governor Harding has made in each of these three ca pacities, 1t is to be understood that full credit is given the entire board as well as to him. There are 70 many occasionH however. when the gover- nor must deal single-hAnded with visitors to his office. or must stand alone before committee of Congress. that he must be much moro than mere mouthpiecs for his board. or than msre individual member. The bert Of boards can lose its contact with Congrsss or with public opinion through having tho wrong individual for eovefnor, and to tho great credit of Governor Harding bs 1t said that this cpntact. and ar essential spirit of cooperation with both public opin- ion and Cong-ess. has never been lost or been even for . moment in hazard.
 Perhaps as significant . test as any Is tho relation which Governor Hard ing has maintained with Congress. The times when he has been called to the capitol to Advise committee have been numeroug. 1hofe han noyer been