225

began 

 

functioning. In some Western towns there have been times 

when all banks in that community failed, and given banks have failed 

over and over again. There has been little difference in liability to 

failure between members and non-members of the Federal Reserve 

System.

"Wilson’s choice of the first members of the Federal Reserve Board was 

not especially happy.

They represented a composite group chosen for the express purpose 

of placating this, that, or the 

 

 

other big interest. It was not strange that 

appointees used their places to pay debts. When the Board was 

considering a resolution to the effect that future members of the 

reserve system should be appointed solely on merit, because of the 

demonstrated incompetence of some of their number.

Comptroller John Skelton Williams moved to strike out the word ‘solely’ 

and in this he was  sustained by the Board. The inclusion of certain 

elements (Warburg,

140

Strauss, etc.) in the Board gave an opportunity for catering to special 

interests that was to prove disastrous later on.

"President Wilson erred, as he often erred, in supposing that the holding 

of an important office 

 

 

 

would transform an incumbent and revivify his 

patriotism. The Reserve Board reached the low ebb of the Wilson 

period with the appointment of a member who was chosen for his 

ability to get delegates for a Democratic candidate for the 

Presidency. However, this level was not the dregs reached under 

President Harding. He appointed an old crony, D.R. Crissinger, as