Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1922-10-20
OUR BANK POLICY
MUST Be DEF INE:D
EUGENE MEYER, JR.. SAYS DEVEL.
oPMENT OF IT'S MACHINERY
is TOO HAPHAZARD.
FOR UNIFIED ORGANIZATION
Comparatively Few State Banks Are
Members of Federal Reserve System
Reasons for Agitation to Permit
National Banks to Have Branches.
BY JAMES p. HoRNAOAY

BY JAMES P. HORNADAY
Washington.-Eu Meyer. Jr.,
managing director of the War Finance
corporation, believes the national bank
ing policy should not only look toward
further development of the federal
reserve system, but that it should rec
ognize the fundamental Importance of
welding into closer md more har-
monious unit the different elements
that go to make up the countrys struc-
ture. 1--WE are at a parting of the
ways" he says. "and ncw is the time
which we are going. We must decide
whether we shall continue the more or
less haphazard development of our
banking machinery, or whether our
action shall proceed along lines based
upon comprehensive view of the
needs of the country, bringing our en-
tire banking structure and resources
into a more harmonious and unified
organization.
Notwithstanding the fact" Mr..
Meyer continued, that more than II, 600
state institutions are now eligible for
membership in the federal reserve sys-
TEN, only about I60O have joined.
And vet in times of stress the non
member banks are in greatest need of
access to a central reservoir credit.
This was conclusively proved by expert
ence Of the War Finance corporation
during the past year. Approximately
81 per cent of the banks to which the
corporation has made loans are state
institutions. and only 10 per cent are
national banks. In terms Of dollars.
banks constitute so per cent of the
whole. And these figures do not take
into account the large advances made
to live stock loan companies, which
are organized under state laws. The
fact that two-thirds of all the banks
in the country, representing 30 per
cent of our total banking resources,
have no direct relation to the federal
reserve system is undoubtedly re pom
sible, in part al least, for some of our
recent difficulties.
Dislike Control, but Want Friends.
Though many state banks have
remained out of the system because
they object to it's supervisory powers.
yet they do not hesitate to advocate
a rediscount system operating with
funds furnished, directly or indirectly,
by the federal government, ignoring
completely the fact that any such sys-
TEN will necessarily carry with it the
banking supervision of the federal gov
eminent.
'"The state banking laws" Mr. Meyer
points out, frequently permit prac-
tees in which national banks cannot
legally engage. This is creating com
petition between the two systems which
cannot be regarded as wholesome and
both Some of the states permit
branch banking on an unlimited scale
AS a result, agitation is now ~oing
on for an amendment to the national
banking act to put the national banks
on par with state banks in this re
or it may be bad. 1t may be good if
carried on in limited way; and bad
if permitted on an extensive scale.
But whether it is good or whether it
is bad branch banking should be con-
sidered on its merits and should not
be the product of competition in the
endeavor to expand either the state
Dr. the national banking organizations.
The competition that exists at the
present time between state and ma
tional banks cannot fail to remind one
OF the competition that prevailed a
generation ago among the various
states seeking to become domiciles for
corporations-a competition that was
based upon the laXit. of the laws gov
erning incorporation. Nothing could
be more disastrous than competition
between the state and national bank
Ing groups upon competition in laxity.'
New Tester for Auto Engines.
The testing of an automobile en-
CINE in laboratory or testing room
is a comparatively simple matter.
The engine may be mounted on a
suitable stand and operated at con-
slant speed and power output, the
power being directly transmitted to
some apparatus, such as hydraulic
brake or electric dynamometer, which
serves to measure and dispose of the
power generated, While the rate of fuel
consumption can be determined very
accurately in a number of ways.
The conditions of such a test, how
ever, are not identical with those un-
der which an engine operates when
driving a car on the road, since in
actual service the power output and
rate of fuel supply are continually
changing, and the support of the en-
CINE itself is in motion. 1t can read
lily be imagined that the testing of an
engine on the road is much more diff.
cult than on the testing stand. The
rate of fuel supply is not constant, and
it is, therefore, necessary to devise
a means of recording the rate of sup
ply at any instant.
Likewise, in actual service the pow
err generated is disposed of in a large
number of ways, such as in overcom-
NEW ALLOY FOR WATCHES