was a poor business man, and the generous wedding dowry which he put into a brewery of his own soon disappeared. One of the heritages which he left consisted of a big book of unpaid accounts. And, as my mother had married against the distinct wishes of her parents, her pride would not permit her to appeal to them for help. So when my father died, she moved with her children into the very heart of the tenement district of the East Side, resolving to fight her way through alone. How well she did it, and what she suffered in the doing of it, will forever make her a heroine in my eyes.

T would be easy to tell harrowing tales of life among the people with whom I lived, and some of these tales ought to be told. But any account that leaves out the real joy of living, as one sees it

even to-day on the East Side, when conditions are undoubtedly worse in some respects than they were forty years ago, would be unfair to the poorer tenement people, who are by no means morbid in their outlook on life. There is no doubt that I suffered as much on account of poverty as does the average youngster now living in lower New York. But, taking it altogether, I was by no means an unhappy boy, even when I was living in the midst of extreme poverty. It is a question whether the son of the "princely merchant" that I read about in the Sunday-school books got as much real

excitement out of life as I did when, for instance, I swam from the end of an East Side dock, contrary to law and in peril of my life, as passing ferry-boats swirled the river into dangerous eddies, or when I spent a stolen day in the swamps of Long Island hunting for cattails and swallows' nests.

Grand Street on Saturday night was as good as a show. It was the great shopping center of New York's lower East Side forty years ago. But not all those who thronged the sidewalks came out to make purchases in Ridley's, the biggest department-store in that part of the city, nor to buy of the peddlers whose little carts lined the gutters, 'block after block, from the Bowery to Essex Street and beyond, spilling over into the side-streets and practically filling Hester Street, which paralleled the main thoroughfare. For those who bargained and cheated, and even for those who did a legitimate business, Grand Street on Saturday night was a serious affair. But for the boys who were out for a lark it was a riot of fun. The "movies" did not exist in those days, and there were practically no boys' clubs nor social settlements, and few institutional churches. There were a great many self-organized social clubs that met on the first floors of some of the smaller "private houses"

-so called because the front doors were usually kept locked-and in rooms back of saloons. But membership in these was only for the older boys who were earning enough to afford that luxury.

For the small boy there was only the gang and Grand Street. Sometimes it was both. This made it all the more interesting. Not infrequently the feuds of the gangs were fought out on Grand Street, sometimes to the great consternation of the merchants of the carts, the contents of which were tumbled into the street in the excitement of a "scrap" between the Orchard Street and Allen Street gangs. Many a plate-glass window suffered on the same account.

I belonged to the Orchard Street gang. Our leader was a short, stocky, redheaded Irish youngster, who was absolutely fearless and who was known to stand his ground alone, the solitary target for the stones of the Allen Street gang, after the rest of the Orchard Street gang had retreated. And on these occasions he came back to his crowd with great scorn; what he left unsaid was not worth mentioning. It did not matter what he said, however. He was always unanimously chosen as our leader. He would probably have been the leader whether we had chosen him or not: he

was the only Irish boy in the gang and he was a born fighter. No doubt he later became a Tammany Hall leader in the district.

And while we're on the subject, it

might not be amiss to say that Tammany might not be amiss to say that Tammany Hall's influence on the East Side was, and is, largely due to the very human. qualities shown by its representatives. They not only know every one who lives in the block, but they know about his domestic and economic and social needs. They know about them the whole year round, and try to supply them; whereas the reformers live uptown and so it appears to the people seem to be in business for the purpose of taking privileges away from the people, rather than furnishing them with jobs, and coal, and food, and getting them out of the police courts if they happen to have trouble with the police. These things Tammany Hall does.

G

RAND STREET was to me the greatest street in New York. Occasionally

I took a walk up Broadway, but "the Great White Way" was then unknown, and Broadway was almost deserted at night. There were no electric lights, and when the few gas lamps in the stores were put out New York's chief thoroughfare was a dreary place. I always came back to Grand Street with a feeling of pride that lower New York possessed the finest street in the city.

In strong contrast to the rough life of the gang and the excitement of Grand Street was the influence which the illuminated cross on the steeple of St. Augustine's Chapel, on Houston Street east of the Bowery, had upon me. I was just about thirteen or fourteen, the age at which the religious appeal takes strongest hold of a boy. This cross, which could be seen for blocks against the deep night sky, appealed tremendously to my religious imagination.

Not that we cared particularly for Stewart; for some reason which I have forgotten, he had not a very good name among the East Siders.

Second Avenue was the great promenade street of the East Side forty years ago. Even in those days there were many German coffee-houses and reading-rooms all along the avenue. It was an event of importance when I was taken to one of them by an aunt or an uncle. Most of them served only coffee or chocolate and tea, and all kinds of German coffee cake. There was a very comfortable, homelike atmosphere about these little coffee-houses, and the people used to linger and gossip or read.

Second Avenue is still the great thoroughfare of the East Side. Early in the morning its wide pavements are crowded with foreign workers who pour out of the tenements in the side-streets and march like a mighty army, all moving in the same direction, toward the clothing factories and department-stores just beyond Union and Madison Squares. Scores of thousands of men and women from the tenements make their daily pilgrimage along this magnificent street, so full of human and historic interest. At night, from the big theater on Houston Street to the Labor Temple on Fourteenth Street, which I organized about fifteen years ago, the avenue is a blaze of electric lights, cafés, bath-houses, motionpicture theaters, jewelry shops, and dozens of other enterprises. Each nationality has its own particular café or casino, where its favorite old country dishes are served and where its national airs are played by native musicians. On Saturday and Sunday nights many of those who have profited in business and moved uptown or out of town come back to enjoy a "regular dinner"-with all that goes with it.

Even a casual stroll down Second Avenue and into some of the side-streets will reveal the signs of the people's aspirations. The way they throng the public baths-the district supports one of the biggest Turkish baths in the city, conducted exclusively for men-shows the desire for bodily cleanliness. There are "beauty shoppes" on nearly every block. Dentists do a profitable business. Even automobile agencies seem to thrive; and palms are used for decorative purposes just as in the automobile district uptown. Pianos and musical instruments are prominently displayed for sale in many of the store windows. Apartmenthouses are given most royal names, like "Florence Court," "Victoria Hall," and "The Imperial."

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SHORT time ago an article appeared in a well-known financial magazine which asked this question, and answered it quite definitely in the affirmative. "Destructive money power," it declared, "no longer lairs only in New York, in the vision of men who are apprehensive that somehow-some time somebody is going to domesticate the free wild money of the Nation and monopolize its powers for selfish purposes. The money dragon of the alarms of the moment is environed in California. It abides in San Francisco, and haunts Market Street instead of Wall Street. It is even concrete enough, in one of its incarnations, to be named. It is the Bank of Italy, thus isolated, and it is, in the abstract, Branch Banking. The abstract 'reptile' already has its serpentine folds round a third of the banking strength of America, and according to its opponents menaces the National bank system and threatens the Federal Reserve structure."

Is this true? Is this article just another piece of scare-mongering or is it based on sober fact? It may not be easy to answer, but one thing is certain -it is everybody's business. In no country in the world is banking so much. a question for every one as it is in the United States, where the vast majority of the people have bank accounts, and where a check, signed and countersigned and indorsed again and again, may take its place for days with the Nation's currency.

The smallest doubt cast on the stability of the National banking system would sound like a knell in the dark places of fear in millions of homes in the United States. The French peasant with his hoardings under the hearthstone of

his cottage, the British workingman,

paying cash as he goes, with little left over, if any, and what he has deposited in the post office savings bank or in his local co-operative society, may have little concern with the way the big banks or the little banks of the country 1 do business.

But the people of the United States, carrying check-books in their pockets as a matter of course, and accustomed to use them on every and

any occasion, are in a different posi- manity's hopes and fears, aims and as

tion.

pirations, laughter and tears and anxieties. The bank president is a man, and he has led and is leading his life, and his business is part of his life, enters into a thousand hopes and a thousand dreams. And so it is all the way down to the youngest recruit among the stenographers or booking clerks. The Federal Reserve Bank is a banker's bank, and as it pays its millions here and receives its millions there it requires but little imagination to see it all for what it is—a great clearing-house for human activity rather than for paper and scrip and dollars and cents. It is, moreover, one of the greatest guaranties of safety to the depositor, small or great, which could well be devised. It is the great each-for-all and all-for-each of the American people.

A short time ago a prosperous bank in a small town in the West had a strange experience. A prominent citizen in the town died, and all the business houses in the city, in order to do honor to his memory, agreed to close their doors for one hour at the time of the funeral. The manager of the bank decided to come into line; he ordered the bank closed, and promptly at the time when the big grocery store on one side and the big shoe store on the other pulled down their shades the bank doors were shut and a card was placed in the window bearing the legend "Bank Closed." What followed was remarkable. Some people who happened to be depositors, returning early from the funeral, saw the notice, never connected it with the function they had themselves just attended, but jumped to the horrifying conclusion that the bank had suspended payment. The news spread rapidly; from all parts of the town terrified depositors flocked to the bank, and when the doors were finally opened a real run was in full swing. It was not stayed until hours after until currency to the amount of hundreds of thousands of dollars had been rushed by motor car from the nearest Federal Reserve Bank and banks in neighboring towns had come to the aid of their hard-pressed colleague to the extent of hundreds of thousands more. Nothing is more delicate, as far as the depositor is concerned, than the credit of his bank. Faced with the persistent rumor that his bank is lacking in stability, and the average man is sorely tempted to be on the safe side-that is, the outside.

they had themselves just attended, but PRIC

RIOR to the establishment of the Federal Reserve System, some eleven years ago, the cash reserves of the country were scattered among 25,000 different institutions, and provided no central reservoir from which banks could draw cash when it was urgently needed. This system of holding bank reserves has been compared to a system of fire protection in which each of the several thousand families in a city keeps its own cistern of water instead of having the whole city's water supply stored in a common reservoir connected by conduits with every part of the city, and so instantly available in unlimited quantities for the putting out of a blaze at any point.

The structure of this Federal Reserve System was completed just prior to the outbreak of the Great War. By November, 1914, it was in full working order. Without it, or something like it, it is doubtful if the United States would have passed through the early years of the war without a financial panic comparable to that of 1907. Without it, or something like it, it is quite certain that the World War could never have been internationally financed. Any one who desires to see how near the world came to utter financial chaos in the middle years of the war has only to read Walter Hines Page's telegram "of greatest urgency" from London to President Wilson to

wards the end of June, 1917. "I am convinced," the message concludes, "that these men are not overstating their case. Unless we come to their rescue we are all in danger of disaster. Great Britain will have to abandon the gold standard."

At the present moment, with speculation running high throughout the United States and stocks reaching levels never before attained, the situation would be impossible without some such controlling influence as that which the Federal Reserve System exercises with its power to check speculation by raising rediscount rates. Any new developments, such as branch banking, which may endanger the efficiency of this system is clearly the concern of everybody.

How does branch banking endanger the Federal Reserve System?

In the first place, it needs to be remembered that many bankers in a position to give an unprejudiced judgment are by no means satisfied that it does. There are, however, a very great number who believe that branch banking is unAmerican and opposed to the individualistic genius of the American people. The situation is really not difficult to understand. The backbone of the Federal Reserve System is the National bank, and National banks cannot engage in branch banking. In States, therefore, where branch banking is permitted, and where this permission is being taken advantage of, there is a strong tendency for National banks to surrender their National charter and incorporate themselves as State banks. Within the last six years some two hundred National banks have become State banks, and it is claimed by one authority that through the elimination of small-town and city National banks the Federal Reserve System is rapidly losing touch with the business and financial life of millions of the American people.

How is all this being done?

The question is best answered by a concrete example, as indicated in the opening paragraph of this article, namely, the Bank of Italy. It first of all needs to be said that this huge organization, having its headquarters in San Francisco and known as the Bank of Italy, makes no secret at all of its operations. Any reasonable information desired is readily obtainable, and from time to time official statements of the bank's expansion are published in the daily press. Any one who travels up and down the Pacific coast must be struck with its ubiquity.. In almost every town one passes through the one building impossible to overlook is the Bank of Italy. It understands the art of advertising as few business houses understand it, and it exploits this knowl

edge to the utmost. The Bank of Italy, however, is only one part of its operations. Behind the Bank of Italy is the Bancitaly Corporation, which was formed, in the words of one of its directors, "to do everything that the Bank of Italy cannot do."

Now the Bancitaly Corporation is undoubtedly one of the largest holding corporations in the world. "This vast investment trust corporation," as one quite friendly writer recently put it, "whose

P. & A. Photos

Representative Louis T. McFadden of Pennsylvania

In

ramifications now extend all over the United States by reason of its holdings in most of the substantial banks in the country and of its investments in choice real estate, has become an eighth wonder of the world." The most recent published list of the holdings of this corporation are indeed truly remarkable. In California the Bancitaly Corporation owns shares to any extent from 100 to 10,000 in the most important banks in the State. It controls two banks in San Francisco and has shares in seven others. Through the Americommercial Corporation, another subsidiary holding company, it owns banks in Los Angeles and has shares in four others. Outside of California, within the United States the Bancitaly Corporation owns shares in the most important banks in Atlanta, Boston, Buffalo, Chicago, Cleveland, Kansas City, Minneapolis, New Orleans, New York, Philadelphia, St. Louis, and Washington. In New York the corporation already controls two banks and has shares in twenty others. Outside of the United States the Bancitaly Corporation

holds shares in the most important banks in Amsterdam, Berlin, Brussels, Copenhagen, Dublin, Edinburgh, London, Milan, Montreal, Oslo (Norway), Paris, Rome, Stockholm, Toronto (Canada), Vienna, and Zurich. Vienna, and Zurich. The Corporation holds shares in the Bank of England, the Bank of Scotland, and the Bank of Ireland, has a controlling interest in the Bank of America and the Bank of Italy in Rome, and is a considerable shareholder in the Reichsbank in Berlin.

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LL this would be a question of no special moment, as far as the Federal Reserve System was concerned, if it were not for the fact that the more powerful financially the Bank of Italy becomes, the more surely can it gain control of other banks engaged in branch banking, and so gradually establish something very like a monopoly. Now State banks can, of course, become members of the Federal Reserve System if they so desire, and the Bank of Italy is a member of the System. But State banks are at liberty to withdraw from the System at will, and National banks cannot do so without surrendering their charter. The advantages of belonging to the Federal Reserve System are very great, but there can be no doubt that, just as the British Empire is virtually a league of nations in itself, while still a member of the organization having its headquarters at Geneva, so a vast internationally flung banking, branch banking, and holding system is virtually a reserve system in itself, while retaining its membership in the Federal organization. It is only a question of to what length it can go.

What is true potentially of the Bank of Italy is also true potentially of several other banks. The fight for control is quite definitely on. Four other California banks have 190 branches between them, while eighty-two banks in the State now own over 600 of the local banking agencies of the State. There are, moreover, already some 300 branches of State banks in Michigan and some 250 in New York. Such great banking centers as Chicago, Minneapolis and St. Paul, Portland, and Seattle are saved from the difficulty by reason of the fact that they are in States which prohibit branch banking. Thus it is seen that branch banking is being developed everywhere to an amazing extent, and the more it develops, the more anxiously is it observed, not only by bankers, but by business men of all kinds, who realize that the stability of their business in the last resort depends utterly on the stability of the banking system of the country.

The latest development is the so-called

McFadden Banking Bill, which, failing to get through the last session of Congress, has come up again in the present Congress.

This bill is backed by the Federal Reserve Board and by the Controller of the Currency, and it is designed, by amending the National Bank and the Federal Reserve Acts, to enable the National banks to meet the State banks on their own ground, and at the same time definitely stop the further spread of branch banking. The combined effect of Sections 8 and 9 of this bill would, in Mr. McFadden's own words, be to confine any form of branch banking within the Federal Reserve System by either State or National banks in what is now non-branch banking territory to the large cities.

"The heart of Section 9," declares Mr. McFadden, "is the clause which says to a State member bank, 'You shall not establish or acquire any more branches outside of the city in which you are located;' and to the non-member State -banks, 'You shall not be permitted to enter the Federal Reserve System unless you relinquish all branches which you

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In other words, the National banks are to be authorized to establish local home town branches in such States as permit branch banks. State member banks are to be permitted to retain such branches as they already have, but are debarred from further extension; while both National and State member banks are debarred from developing branch banks in any State at present closed to branch banking but which may subsequently permit it.

At the same time, under the proposed act, the National banks would be accorded privileges and facilities so as to enable them to compete on favorable terms with the State banks. They would be authorized to absorb State banks directly, to acquire real estate for further banking needs, and to make larger loans to customers on non-perishable agricultural commodities. They would be further helped by increasing the limits on the amount of paper of a borrower that may be rediscounted by a Federal Reserve bank. National bank charters

would be given for an indefinite period

so as to enable National banks to administer long-time and perpetual trusts, as is now done by State banks and trust companies, and by permitting them to make city real estate first-mortgage loans for as long a term as five years, instead of one year, as at present. How far such expedients would be successful time alone would show. That something of the kind must be done if the present situation is to be met is an opinion very widely held.

"Whether branch banking be good or bad of itself," says the "Magazine of Wall Street," "it is certain that it will undermine if not wipe out the National bank system, unless the banks of that system be permitted to fight fire with fire. And when the National banks are eliminated, or even substantially reduced, the Federal Reserve System becomes a phantom or a hollow shell." As to the final justice of such conclusions, opinions will differ, but there can be little doubt that the branch banking system represents a great revolutionary process at work in the body financial of the country, and as such vitally affects the interest of the American people as a whole.

LMOST the last thing I heard in America before sailing back to France was an urgent request from an influential New York hostess and a brilliant actress almost as popular in Paris as in the United States to let I them know if it was true that there had developed in France an antagonism to Americans. Millions of people in America would detest the idea; they are happier in France than anywhere else in Europe and entertain for the French nation the same feeling which many Frenchmen cherish for Italy or Polandat all events the supremely distinguished élite in Warsaw or Cracow. The douceur de vivre which seems to permeate the atmosphere the moment you land at Havre or Cherbourg would promptly disappear if sourness or sullenness replaced the familiar smile generally welcoming Americans. But is there any real danger of such a change?

I am afraid that some members of the American colony in Paris are largely responsible for the idea. Not that they themselves are conscious of any unpleasantness-more than half of them become in time almost undistinguishable from natives-but because they get irritated

By ERNEST DIMNET

DIMNET, the dis

Ctinguished French schol

ar, wrote this article upon his return to France from visiting in America. It is a delightful study of international psychology. Don C. Seitz presents another phase of the question in the article which follows.

at the rush of American visitors whom the stabilization of the pound and of the mark has diverted from England and Germany, and fear to be drowned in the multitude of their own countrymen. It is by no means infrequent to hear them. talk as if they were the authorized mouthpieces of the French, and with a vim resulting from the combination of their love for France with their freedom of speech as Americans. How should not the French get irritated? they say. More than half a million Americans crowd Paris every year; the American colony in Paris has risen from 28,000 to nearly 50,000 since 1923, and the cost of living registers their presence. The dol

lar can buy everything, and does buy too many French out of their homes. Do you in New York realize, they go on asking, that the triangle marked by the Crillon, the Opéra, and the Hôtel Regina

-that is to say, as vast a section as forty blocks along Fifth and Madison Avenues-is entirely American, and practically as forbidden to the French as the Concessions Quarter in Shanghai is forbidden to the Chinese, because they can afford there neither a room, nor a meal, nor a jewel? The heart of Paris-the Place Vendôme-consists of American hotels or American banks. Number the châteaux in Brittany, Normandy, or the vicinity of Paris now American-owned. Where do French pictures, French statues, and French furniture go in rapid. succession, especially now that the upper middle class is getting poorer? Whole country houses are shipped over to incongruous surroundings. And is it not true that half an ancient French monastery, loved and admired, it must be admitted, by the American artist who bought it, now shows its melancholy beauty near Fort Washington? How could the French not resent this? Above all, how could they not resent the atti