Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-10-07
OPPOSED.
Continued from Page One.)


Many millions of savings deposits
have thus been created In rural
communities, there is no need for sep
arate savings banks. Banks doing
commercial business are now satis-
faetorily caring for this business.
These deposits are safely loaned OUT
at home. There is rarely any local
market for bonds of any character. 10
require country banks TO invest saw
ings deposits in any one class of Sc
curities, to forbid their use for local
farming and business needs to divert
this money from local to foreign pur-
poses, will seriously cripple the cred
1t of their customers and result in the
very condition which il is the aim o.
this legislation to prevent. Segrega
ton Of savings deposits, the setting
aside of separate capital, the creation
of two banks under the same man
aeement and under one roof, viii
place burden upon country banks
which they cannot bear and Will deny
to their patrons facilities which they
require and now enjoy.
That Section Il of the bill should
be amended insofar as it refers to
matters pertaining to exchange. We
suggest that Section Il. Page 80. be
amended by eliminating the last word
on line IL, the first five words on line
is. the balance of section after the
18th line, leaving the last paragraph
of Section II to read as follows:
1t shall be the duty of every fed
eral reserve bank, to receive on de-
post at par, ana without charge for
exchange or collections, checks and
drafts drawn by any of its depositors
upon any ether depositor and checks
and drafts drawn by any deposition in
any other Of the federal reserve banks
upon funds to the credit of said de
positor in said reserve bank last men
toned Exchange profits represent a
large part Of the total net earnings of
country banks. 1t is a proper charge
for A fair service rendered. The bill
TOW drawn will decrease the net earn
ings of the average country bank by
not less than p per cent and many
of them much more. This gain Will not
go into the pockets of the business
men but will be enjoyed solely by the
hanks of the collection centers which
are now making satisfactory profits
The result of this section will be to
take income from banks that can least
q ford the loss and give this money to
banks that are already earning salts
factory profits. In addition to the
above, the bill provides that they shall
be cleared and not collected. To ac-
ccmpllsh this, it would require that
the small country banks keep in the
federal reserve banks an amount in
excess of their legal reserves sufficient
to care Tor their elearings from two
to six days, depending entirely upon
the distance and time they are from
the bank acting as such clearing house.
44.-That whatever percentage of
reserves is agreed upon should carry
with it the right to keep not less than
cne-third of such reserves with APP
proved reserve agents in fiscal centers.
The reduction of reserve from Is to Il
per cent. is no real advantage to the
country bank. Very few country banks
can do business without having Il
larger amount of funds either in vault
or with nearby connections. These con-
noctions must be maintained after the
passage of this law The money so
held by them should be counted as a
part of country bank reserve.
"5.-That the above matters include
only those features that country bank
ers are especially copcerned with
There are others of equal Importance
which concern the larger banks in the
fiscal centers. With these subjects We
DO not propose to express an opinion
but we believe unless this bill is
amended so as to meet the objections
and recommendations made herein,
that very few country banks, either
state or national, can afford To be-
come members of the new federal sys-
TEN. This means that the great major
ity of country national banks must
their charters or retire from
bueinoss. The exchange and savings
eections of the bill will SO reduce our