Reserve Record

In keeping with the vastly enlarged powers and responsibilities it conferred on the governors of the Federal Reserve Board, the Banking Act of 1935 required them to submit with their annual report a record of all actions on matters of policy.

Tendered respectfully to Speaker Bankhead of the House of Representatives last week was the second such record. With bone-dry formality it stated the decisions, votes and reasoning of the Board at 15 meetings during 1936, disclosed one surprising fact: the Board was not unanimous but divided on its most generally applauded action, the first, 50% increase in member bank reserve requirements, which took effect last August. The dissenters: Governors John Keown McKee and Chester Charles Davis. Whether they disagreed in whole or in part with the Board's consensus was not revealed. Whether or not they came around to Chairman Eccles' side when reserves were hiked a second time last January (TIME, Feb. 8) presumably will not be known until the Board makes its report next year.

Meanwhile last week onetime AAAdministrator Davis, who once served as Montana's Commissioner of Agriculture & Labor, was glooming in Glacier National Park at a meeting of the Montana Bankers Association. He confessed that although on leaving AAA for the Federal Reserve Board he thought he was "sailing from a storm-tossed sea into a comparatively smooth and protected harbor." now, after a year, he was not so sure. Said he: "If another crisis finds the American banking system disorganized and ineffective, the American citizenry . . . may . . . seize a short cut. . . . Certainly public opinion at such a time will have scant patience with past timidity and inertia of bankers, and with petty bickerings for power among official agencies. . . ."

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