At the same time, another New York bank was borrowing from the Federal Reserve Bank about $40,000,000, which was more than the aggregate loans which the Federal Reserve Bank of Minneapolis was lending to its 1,000 member banks in the great states of Minnesota, North and South Dakota, Montana and part of Wisconsin.
Another New York bank borrowed from the Federal Reserve Bank a sum which was greater by $30,000,000 than the Federal Reserve Bank at Dallas was lending to all the banks in Texas, Louisiana and Oklahoma.
Still another New York bank got a loan which equaled the total loans allowed by the Federal Reserve Bank of St. Louis to the 569 member banks of that very important district, which includes the whole state of Arkansas, parts of Illinois, Indiana, Kentucky, Tennessee and Mississippi, and the larger part of Missouri.
Take the Fifth Federal Reserve District, served by the Federal Reserve Bank at Richmond, Virginia: one New York bank was able to borrow from the New York Reserve Bank more than the Richmond Reserve Bank would lend to all its member banks in Maryland, Virginia, North and South Carolina and the larger part of West Virginia.
That is the situation. The twelve regional banks, which were supposed to make money serve all parts of the country equally, have apparently been “overcome in an administrative way” to such an extent that the New York Federal Reserve Bank is to all intents and purposes the Central Bank of the United States, and serves the speculative part of the country with millions, while the productive part of the country is permitted to wilt with paltry thousands.
When it can occur that four New York banks can borrow from the New York Federal Reserve Bank as much money as the banks of 21 states were able to borrow from the five Federal Reserve Banks of St. Louis, Kansas City, Minneapolis, Dallas and Richmond—there would seem to be need of explanation somewhere.