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Governor of the 

 

 

Board, and named several other super-serviceable 

politicians to other places. Before his death he had done his utmost to 

debauch the whole undertaking. The System has gone steadily 

downhill ever since.

"Reserve Banks had hardly assumed their first form when it became 

apparent that local bankers 

 

 

 

 

 

 

 

had sought to use them as a means of 

taking care of ‘favorite sons’, that is, persons who had by common 

consent become a kind of general charge upon the banking 

community, or inefficients of various kinds. When reserve directors were 

to be chosen, the country bankers often refused to vote, or, when they 

voted, cast their ballots as directed by city correspondents. In these

circumstances popular or democratic control of reserve banks was out 

of the question. Reasonable efficiency might have been secured if 

honest men, recognizing their public duty, had assumed power. If such 

men existed, they did not get on the Federal Reserve Board. In one 

reserve bank today the chief management is in the hands of a man 

who never did a day’s actual banking in his life, while in another 

reserve institution both Governor and Chairman are the former heads 

of now defunct banks. They naturally have a high failure record in their 

district. In a majority of districts the standard of performance as judged 

by good banking standards is disgracefully low among reserve 

executive officials. The policy of the Federal Reserve Bank of 

Philadelphia is known in the System as the ‘Friends and Relatives 

Banks.’

"It was while making war profits in considerable amounts that someone 

conceived the idea of 

 

using the profits to provide themselves with 

phenomenally costly buildings. Today the Reserve Banks must keep a