Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-05
STRONGER FEDERAL
RESERVE IS URGED
Owen D. Young Believes Sys-
tenn Should Include All
Banks in U. S.
BY JOHN F. SINCLAIR.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, February 5.-Owen D.
Young, member of the board of d.
rectors of the Federal Reserve Bank OF
New York, told the Glass committee of
the United States Senate yesterday
that a sound banking system through
out the United States is not possible
until all State and National banks are
members of the Federal Reserve sys-
tenn. Mr.. Young thinks, this condition
is first in Importance and believes It
should be brought about even If the
Constitution of the United States has
to be amended to overcome the OBJ
jections.
Mr.. Young no doubt had in mind the
fact that of the $4,000 banks left in the
United States, less than 40 per cent
are members of the Federal Reserve
system. The others are outside the
fold.
These outside banks can get no help
from the Federal Reserve, and yet OF
the 1000 banks that have failed during
the last 10 years, five out OF every six
have been State banks-not members
of the system" according to Mr.. Young.
Unquestionably Mr.. Young has hit
upon a weak spot in the American
banking system and something must be
done to more effectively unity and
strengthen the position OF the State
bank now outside of the Federal Re
serve system. But how to do 1t is the
problem.
panic of Plenty"
William j. Graham, president of the
American Management Association and
vice president of the Equitable Life As
surance Society, thinks the present
business condition is a panic Of
plenty"
when life insurance was being as
sailed. it found little or no public sup
port from the real owners OF the busl-
ness-the policy holders, said Mr..
Graham. why? Simply because the
policy holders had not been taught to
recognize themselves as owners of the
business, with power to turn out I'M
worthy individuals in its management.
True enough! But many corpora
tions today have 100000, 100000, even
500, 900 stockholders. What stockholder
is strong enough to make a campaign
to Gust the management under such
conditions? 1t would take plenty OF
time and fortune to do 1t, unless the
MANAGEMENT showed UP scandalously
inefficient or corrupt.
Mr.. Graham believes that every large
business today should express its public
relations obligations to an exacting
public by supplying the public with
services and good articles. honestly pro-
duced, properly advertised, and made
known to be as right as right can be;
and while doing this to attempt ac-
tually to perform this task-the elm
nation of business distress such as is
now evident in economic maladjust-
ments that must be charged to man
agement, when panic of plenty can
exist"
Sees Signs Of Saving.
Darwin p Kingsley, president of the
New York Life Insurance Company, be-
lieves that the United States is saving
and investing its surplus funds, and
bases his belief on the fact that his
company's new paid-up business for
1880 amounted TO 5000, 900, 000-all
ordinary" insurance-on 323,745 pol
icies.
Since the New York Life was organ
lied in lS45 it has paid out total of
over $4,000, 00o, 900, more than two
thirds Of which was in the nature Of
dividends surrender values, matured
er1dowments, etc. 100
The company invested Size ,ooo, 900 in
American business during the year. an
average of $3.50, 600 for every business
day. In its assets. on January l, the
company had mortgage loans of $57S,-
100000; and in bonds and preferred
stock another $783 900 900.
The company's total insurance in
force is now almost S7,750, 600 900. Elk
President Coolidge is member OF its
board of directors.
Pratt's Career.
Herbert L. Pratt, chairman of the
board Of the Standard Oil Co. OF New
York, who has just announced an in
dustrial insurance and pension plan
for the As. ZOO employees of his company
the most far-reaching that has yet
been worked out in American business
is of the second generation Of the ia
nous oil family. His father was a
partner of John d. Rockefeller, ST.
Brooklyn has been the home of the
Pratt family for many years
There H. L. Pratt was born SO years
ago After graduating from Amherst
College, he entered the oil business with
his father and has been in it an his
business life.
In addition, he Is a director of the
Bankers Trust Co., the American Can
Co., Stone g. Webster and trustee of
the Pratt Institute of Brooklyn.
The Pratt fortune is one of the largest
In America-not less than $500. 000, 900.
In his will, the elder Pratt provided
against distributing the estate up to
the third generation. So the assets
have been piling up-higher and higher.
Copyright, 1881, by North American News
paper Aluance)