The Washington times., 1913-12-31
STOCKHOLDERS TO
VOTE ON JOINING
Local Bank Directors Will Put
Federal Reserve Questions
Up to Holders.

The new regulation of the Federal
reserve organization committee, COM
posed Of Secretaries McAdoo and Hous-
ton. touching conditions of membership
in the Federal banking system, has in
tected new feature into the consid-
GRAFTON of the question of joining b.
the banks of this city.
While final action as to whether any
bank would or would not join the Fed
eral system has heretofore been con-
sidered the function OF the banks board
of directors. it is likely, in view of the
committees new regulation. announced
today. that the directors will pass the
determination of the question up to the
stock holders, with or without recon-
mendation, but in most cases with rec
ommendation that the banks join.
The question Of the position of the
directors Of a bank who would vote
not to enter the system while a ma
jority OF the stock desired opposite
action was raised by one banker While
this question would probably not act
ually arise, the contingency ic worth
considering, he pointed out, and as
consequence the voice of the stockhold-
ers will be asked.
All Of the national banks hold their
annual stockholders meetings next
month. and notices of such meetings
will, as a rule, contain a clause au-
tf,orizing the consideration of this
question at that time. In the mean
time most of the boards will have made
up their minds as to their recommends
tions. Trust companies are still con-
sidering the question of joining
The regulation reads as follows:
THE Federal reserve act provides for
membership OF banks operating under
State charters as well as membership
OF national banks. No new Charter is
contemplated in either case. Eligible
banks become members by becoming
stockholders in Federal reserve banks
when their applications have been
properly approved and stock has been
allotted to them. Such subscription to
to the capital stock of the Federal re-
serve bank appears to be a matter
within the province of the board of di-
rectors Of the subscribing bank.
THE organization committee, there
fore. deems il unnecessary to require as
a condition precedent to membership
that the stockholders should take any
formal action.
"Inasmuch, however. as the stockhold-
ers of a bank have the legal right by
necessary vote, to force a solvent bank
to liquidate and to dissatisfied with the
action of the board in becoming mem
bers might exercise this prerogative,
bank desiring to take the precautionary
measure of canvassing the sentiment 2f
the stockholders may by resolution of
their boards submit the question to the
stockholders either at the next regular
meeting or at a specially called meet
ing. This course is, however, not insist
ed upon by the organization committed.
Those national banks passing resolu-
tions of nonacceptance on or before Feb
ruary %, 1914. should, as soon there
after as convenient and before the ex-
piration of the twelve months prescribed
in the Federal reserve act, submit their
action to the stockholders for confirma-
ton, since nonacceptance of the provis-
ins of the Federal reserve act will ulti-
mately involve the liquidation OF such
national bank"
Chairman A. G. Clapham. Of the
clearing house committee, preparing
Washington's arguments for the loca-
ton Of a regional reserve bank, was
back at his desk today and stated that
the work of the committee is going
forward.
The Commercial National Bank has
voted 10 add 5000 TO its surplus, bring
ing the surplus of that institution up to
$50. 60. This action was taken after
declaring the regular quarterly divi-
dend.
I re year on the local stock exchange
closed TODAY with d better volume OF
business than Cor several days A to-
tai of $3.50 in bonds and Il shares of
stock were traded. A quotation lot OF
Commercial National Bank sold at lS5.
other stock sales were of fractional
lots. Capitol Traction bonIs sold today
at I07%, for $500. Three Potomac con-
solidated bonds sold at 9SI. and $1,000 of
the first 5s 1T Io6.
Arthur B. Sperry. formerly Of Wash
ington, has been made maEager of a
new municipal bond department to be
csta ablished Friday by the banking house
of Holmes, Wardrop & Co.. OF Pitts
burgh. The firm will deal in entire is
sues of Pennsylvania municipal and
school bonds.
The decrease in gross earnings of the
Baltimore and Ohio railroad 10. Decem-
ber will not be so large as that for
November. according to a statement Of
President Willard. made in New York
Tuesday.
Thomas G. Moore has beeI made man
agcr of the Potomac Insurance Com
pany. He was formerly suDe-intendent
of Canadian agencies of the German-
American insurance Company