The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-12-04
STEP TAKEN TO END
BANK CHECK CHARGE
Clearing House Adopts Rule
Opening Up Possibility In
der Reserve Law.
GREAT ECONOMIC SAVING

The hr.t step IN the revolutionizing OF
the system OF bank check collection and
clearing which Is expected to result from
in. operation OF the Federal reserve banks
VA. made evident Yesterday in an amend
,rent adopted by the clearing house COM
,rlt,ce OF the New York Clearing House
in regard to the charges for out Of town
check collections. The possibility OF ulti-
mate free collection OF checks IL OF large
inheritance in this section OF the United
States.
The amendment made the charge OF
collection Discretionary matter with the
collecting banks members OF the Clearing
House. for all items whether such items
are collected through the Federal Reserve
Rank In New York or otherwise) which
tie Federal Reserve Bank in New York
shall have notified the manager OF the
New York Clearing House Association II
will receive from its members for immedi-
ate credit at par
This is not important for the immediate
results 90 be achieved, as the number OF
checks now being received by the Federal
Reserve Bank at par Is small. As state
lnent Of general policy. however, 1t is
significant. for IT gives the members Of
the Clearing House the opportunity to fol-
low whatever lead In reducing or elimi-
mating collection charges the reserve bank
here may take.
The reason the members OF the Clear
ing House can follow the Federal reserve
bank IN this matter Is that the acceptance
OF out Of town checks by the reserve bank
At par makes these checks practically
cash. Any member bank receiving such
checks. therefore, can Immediately take
them 20 the reserve bank and get cash.
The expense OF collection so far as the
bank holding the check is concerned is
thus eliminated. The State banks, II is
pointed out, can enjoy the same privileges.
unless directly ruled against by the Re-
serve Board. which is unlikely. by turn
ing over their out OF town checks to
members OF the reserve bank.
The reserve bank OF New York has
notified the Clearing House that il Will
accept for immediate credit at par checks
II member banks on member banks
IN New York. Brooklyn and Al
bany and checks Of member banks
on other reserve banks This latter ac-
ceptaAce will enable out of town national
banks 10 remit to. New York at par
through the reserve bank, and 1t is under
stood that there is a similar reciprocal
Arrangement
The final means by which this transfer
banks has not been decided upon For
4 time deposits of funds may be made by
various reserve banks at the Sub-Treas-
uries
The plan for such collections proposed
by committee contemplated d central
fund VI gold, kept possibly at Chicago,
on which certificates could be issued. to
be forwarded to various reserve banks on
periodical settlements of their debit bal
tuces. lie bulk OF the collection work be-
Iug accomplished through the balancing OF
bookkeeping entries
The governors OF the twelve reserve
banks will meet in Washington on De-
lemoer 10. ! and IL TO discuss the de-
ta..ed plans for a broad system of coun-
tryNide check collection and balancing
Bankers said yesterday that the machinery
- the reserve system affords an uneN-
amplCd opportunity OF doing away IN time
with marked differences In domestic ex-
change