Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-21
FEDERAL RESERVE BODY
HAS DEFIED POLITICS
Powerful Board Indifferent to Pressure
How Organization Is Made Up.
Scope of Powers.
BY BASIL MANLY.

policies of the richest nation
on earth. Their decision may cause a
crash of billions in stock market values.
It may make a million men rich or
million men poor. 1t may create a
crisis In London, Paris or Berlin.
These eight potential masters of the
destinieS of nations are the members
OF the Federal Reserve Board, which
rules the greatest banking system in
the world. To them the monarchs of
the world must turn before they de-
termine their fiscal policies. Even the
proud British Empire did not dare at
tempt to return to the gold standard
until assurances of cooperation and
financial support had been received
from the Federal Reserve Board. They
hold In their hands potential influence
over the financial systems of the entire
world, and If they have not used these
powers to the limit it has been because
of self-restraint and not from lack of
authority.
And yet, II clothed with a magic
cloak of invisibility, you could pass the
closed doors which guard this august
financial tribunal with secrecy as
great as that Of the Presidents cabinet
room or the chambers of the Supreme
Court the chances are that you would
recognize only one man in the room.
That one would be Andrew w. Mellon,
ex omcio chairman of the board, who
seldom attends its meetings and takes
little active part in. its proceedings.
The seven other members of this
great financial agency are so little
known to the public that they might
almost be called 1.-The men whom nobody
knows" They make few public
speeches. Their pictures are seldom in
the papers. They never pose for the
movies. And they have never raised
the question whether they should pre-
ceoe or follow the Vice Presidents sis
ter at diplomatic functions.
Modesty Of Governor.
The governor of the board, who has
D sense Of humor, sometimes tells of his
experience ct his first White House re-
ception. He had recently come to
washington and paused as he sauntered
toward the receiving line to admire
some OF the White House treasures. In
true Western fashion he thrust his hands
INTO MS trousers pockets as he stood
MS shoulder and the voice of a secret
service man rasped out, Come on.
YouH nave to- get your hands out of
your pockets and move on!" And the
mead OF the Nations banking system did
a. he was told >
IL would be dificult to assemble eight
men more widely diversified in back
ground, training or experience. They
INCLUDE q big business man. a bank
examiner, banker, an editor, q college
professor, lawyer, a merchant and a
farmer.
This Is no accident. The law pro-
videS for geographical diversity by
prescribing that not more than one
member OF the board shall be appointed
from any Federal reserve district and
states that the President in making his
appointments Shall have due regard
to fair representation of the different
commercial, industrial and geographical
divisions Of the country" Under the
law at least two must be experienced
In banking or finance" and one must
be farmer.
The purpose Of Congress in providing
for this diversihcation OF outlook and
interest was to insure that the Nations
financial policy should not be controlled
or determined by any financial CLIQUE
or by any section of the country. And
to safeguard still further against the
influence of the big banks, which was
greatly feared when the Federal reserve
act was written, 1t is specified that no
member Of the board may become an
of1cer or employe of any bank within
two years after leaving Office, unless he
has served out the full term for which
he was appointed.
Andrew w. Mellon, Secretary Of the
Treasury, and by virtue of his office
chairman Of the Federal Reserve Board,
needs no introduction. Trained in his
fathers bank and with a lifetime of
experience in every phase of domestic
and international finance, he brings to
the board not only business wisdom,
but great national prestige.
Governor Is Youngest.
Roy A. Young, the present governor,
Is the youngest man on the board.
Less than 80 years ago he was a mes
Senger for the First National Bank of
Marquette. Like one of Ayers heroes,
he went up the banking ladder rung
by rung until in 1919 he was appointed
governor Of the Federal Reserve Bank
OF Minneapolis. From the standpoint
Of honor he again advanced step when
he came to Washington in 1927 as
governor Of the Reserve Board, but in
dollars and cents 1t meant drop from
$4,000 to $4,000 a year.
In Edmund Platt, who has been vice
governor under three Presidents, we
meet different type. Educated at
Harvard and Eastmans Business Col
lege, he went into the newspaper BUSH
ness, where he specialized on financial
news. AS writer, editor and publisher,
he studied banking from every angle
When he came to Congress in 1918, it
was natural, therefore, that he should
seek q place on the banking and cur
rency committee, where he helped to
write the Federal reserve act. Becoming
chairman of the committee after the
Republicans gained control of the
House in 1918, he resigned to accept an
appointment to the board at the hands
OF Democratic President.
Adolph C.. Miller is another nom
banker member. But he has the respect
OF the bankers. A. d. Welton of the
Continental g. Commercial National
Bank of Chicago has described him as
having "a mind singularly free from
prejudice and admirably equipped to
ferret out and interpret facts" Educated
at Harvard and the Universities of
Paris and Munich, he taught economies
at Cornell, Chicago and the University
, of California before he was appointed
! by President Wilson one of the members
Of the board at its creation in 1914.
Another original member OF the board
/ who has held Office for is years Is
Charles S. Hamlin Of Massachusetts,. A
! lawyer by profession, but with q decided
| bent for finance, he served as Assistant
Secretary of the Treasury under both
Cleveland and Wilson.
George r. James, the only Southern
member Of the board, is 3 Tennessee
merchant and manufacturer. He i
also practical banker and has the
reputation of knowing more about
: Southern business conditions than any
j one in Washington.
Edward H. Cunningham of Iowa i
the farmer member of the board. He
I served two terms in the Iowa Legisla-
ture and has first-hand knowledge oil
conditions In the corn and wheat belts