were decided upon. An examination of Mr. Warburg’s printed discussions of the subject shows that he at one time considered four, then eight. Eventually, twelve were established. The reason was that one central bank, which naturally would be set up in New York, would give a suspicious country the impression that it was only a new scheme to keep the nation’s money flowing to New York. As shown by Professor Seligman, quoted in the last number, Mr. Warburg was not averse to granting anything that would allay popular suspicion without vitiating the real plan.
So, while admitting to the Senators who examined him as to his fitness for membership on the Federal Reserve Board—the Board which fixed the policies of the banks of the Federal Reserve System and told them what to do—that he did not like the 12 district banks idea, he said that his objections to it could “be overcome in an administrative way.” That is, the 12 banks could be so handled that the effect would be the same as if there were only one central bank, presumably at New York.
And that is about the way it has resulted, and that will be found to be one of the reasons for the present situation of the country.
There is no lack of money in New York today. Motion picture ventures are being financed into the millions. A big grain selling pool, nursed into existence and counseled by Bernard M. Baruch, has no hesitancy whatever in planning for a $100,000,000 corporation. Loew, the Jewish theatrical man, had no difficulty in opening 20 new theaters this year—
But go into the agricultural states, where the real wealth of the country is in the ground and in the granaries, and you cannot find money for the farmer.
It is a situation which none can deny and which few can explain, because the explanation is not to be found along natural lines. Natural conditions are always easiest to explain. Unnatural conditions wear an air