The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1922-10-21
BIC NEW YORK
BANKS SEEKING
POWER Of OLD
Their Importance Lessened
By Satisfactory Workings
of Federal Reserve System
BY ROGER BABSON.

convention az the American Bankers
Association which was held last week
in New York. Owing to the contro.
versy which this discussion has devel-
oped. Roger W. RabSon was to-day in.
terviewed regarding the probable out
come.
"Of course the discussion is the ma
tural outgrowth OF the establishment
Of the Federal Reserve Banks. Before
the DAYS Of the Federal Reserve sys-
ter" says Mr.. Rabson. "a branch or
Canization practically existed. al
though il was m UNCONSCIOUS and In
visible organizatio For instance,
the small bank in Indiana took orders
from its corresp ondent bank in India.
napoli.: and the Indianapolis bank
took it's orders from a stu bigger
bank in New York. The heads OF a
few OF the eNw York banks would hold
a conference at the home or the late
J. Pierpont Morgan or at the home OF
Mr.. Baker, Of the First National Bank,
and decide upon policy. This policy
they would pass along 10 the large
banks OF Boston. Chicago. Philadel-
phia indianapolis. st. Louis. New Or
leans. and other large cities. The
banks In thees large cities would in
turn pass the same policy on to tho
small banks nj their districts. There
we're no contracts or stock control en-
fstinS between the banks. but there
was an invisible control which was
very powerful With the organization
az the Federal Reserve Banks. the
clearance OF checks at par and the
LEGISLATION agains; interlocking direc-
torates. this control was given ire
mendous Jolt. No longer is 1t mucn or
an object for a country bank to keep
a deposit with the large city bank.
Tina there has been a gradual DRIFT
ing away on the part OF the country
hanks from the city banks. The large
cities have become more independent
~ New York. and the country banks
have become more independent OF the
Iarss cities. AS long as the money
ra,es were high. this did not worry
the city banks. but during the past
year. when money rates have oeen ae-
eliniug, the large city banks nave ais
tincuy felt the loss OF their former
newer Hence. they are LOOKING
around for some plan TO get their coun'
try following back again.
, FEDERAL Reserve System
.r, l.. no hope OF breaking up the
$50, pss.rye system which 10 rune
.,on1nc very satisfactorily. Inc u.en
,aa With the Federal HessV'7
So. ,r. active and ambitious Au1y
80 hu,Id,nS permanent and suosIa"c".
h,,kInr houses and are accu'"ue
-, resources. They are 'sSu'hs
oorrs and other publications wnien ~
psa, greatly 20 the country oanNs' -
larger city banks are distinctl! "o.'
"nom, TITS and are looking tor some
Aoou' ,or racouping their pres
80 They first turned their attention
- Eore;pn Trade organizations ro'-
t., r-adc' vas the key note at INC
a-,c,n Bankers Convention TWO years
90 The foreign trade business
nver has no, panned out "a vel rs tne
ha,k. had hoped Il would. ana on. re-
COW, tariff has given almost oea'"
h,oy 70 what little new foreign t'aue
mad Thus, the banks hopes IN ."''
rard are not very saaguine al t"e " =,
.,t Another attempt has SHOWN ~
". - ,na organization OF separate In
.os,ns,rs' companies and separate &C
..o,,,rs' companies These have oeen
.s,,,zed nv many OF the lsrger oaaSs
and most OF them are operating success
,,,,,v Banks are finding these Invest
nsnt companies more prodtahl" az tne
,ronen, than their foreign trade adTeh-
,urc The banks are gradually coming
70 the opinion. however that theF 'a'
recover their influence with the county,
districts only with organization ..
h-a..r hanks Hence. there lie n drive
q, present 20 have The National Bank
laws amended so that CITY bank can
own a system Of branch banks In me
surrounding cit!cs and towns. Whether
nr no. this is IN lin" with pemocracy. Is
, ar dehatah,c question: hut the drive
* On and nv guess "a that such branch
ba,ks arc a. inSvitahl" as tho "Ha''
store