The Washington times., 1914-06-18
RESERVE BANK MEN
MAY QUIT EXCHANGE
New Federal Statute Limits
Privileges of 0fficers-Much
Discussion Caused Here.

Limitations placed by the Federal
reserve act upon the activities CT Of
Iicers and directors of the member
banks of the Federal reserve system
will, it is generally believed. both by
many Washington financiers and Of
ficials of the Treasury Department, pre-
clude any individual with such a bank
connection from holding a seat upon a
stock exchange or from executing
brokers orders.
When questioned upon this point this
morning Comptroller of the Currency
Williams, a member of the Federal
reserve board now in process of or
Eanization, said that he considered the
provisions of the reserve act very plain
on this particular subject.
The law as il relates to the activities
of officers of the bank is embraced in
section - Of the act, and reads, in
part, as follows:
Other than the usual salary or d.
rector's fee paid to any officer, director,
or employe of member bank and other
IMAM a reasonable fee paid by said
bank TO such officer. director. or en-
ploye for services rendered to such
hank, no officer, director, employe or
attorney of member bank shall be a
beneficiary Of or receive, directly or
any zee, commission, SlIl or
other consideration for or inscnnnection
with any transa action or business CT
the bank"
At present there are several members
OF the exchange who hold with certain
Of the members banks of the reserve
system positions which are in tie cfas-
sifications barred under this law. It is
understood that Comptroller Williams
has written TO these particular indi-
viduals advising them of the provis-
fnra ~ TI, 10, will hnnn af-
fective Immediately upon the organiza-
tlon Of the hese-ve banks When asked,
however. whether or not he had sug-
sested to these members of the eX
change that they should cease their
activities upon the exchange, Mr.. VII
liams said that he did not care to say
whether he had issued such a sugges-
lion or order, as he did not desire to
disclose his communications with ma
tional bank officials.
This subject. the membership of
hankers in the exchange, has frequently
been the topic of discussion. the Wash
lngton Exchange is said to be the only
"Xchange in the country in which bank
officers are permitted to hold member
snip and do brokerage business. In this
oity. however, this business has proved
"f profit to several Of the banks which
"ngage In it.
The bankers here doing such a busi-
ness not only deal for customers in the
securites listed on the local exchange.
Exchange securities, and while they
are not permitted to belong to that
body, have them executed through their
New York correspondents and secure a
commission.
Chandler & Co.. Inc. dealers in high
Grade investment securities, with Of
ices in London. New York, Philadel-
l.hia. Boston. and Lancaster. Pa, have
upened a branch office in this city at
7i2l r street northwest, and have ap-I
rointed William E. Lewis, a Washing
oman, resident manager.
The company will offer through its
Washington office all the securities be-
* handled by IL, but will devote oar
ocular attention to the promotion of
ne securities of local utilities COM
1anies.
Trading on the Washington took
ENchange today was confined TO two
ssues. Mergenthaler Linotype and
'apital Traction The sales in each
ere limited to add lots. The dealing
.,Urirg the regular call consisted of
'.rirty-four shares of the MergenrhaleT.
hich sold at 2is. The % shs res OF
aP'tal Traction were sold after :sall.
.fored fractIonally lower, but no trades
suited.
Robert J. wynne. former Postmaster
';"ueral, who was recently deposed
rom the presidency of the First Ma
'cnsl Fire Insurance Company, vas
ast night reelected to that position hy
nc new board of directors selected at
20 stockholders meeting held late yes
Crday afternoon. Former Senator
red T. Dubois was elected first vice
.'reasident and treasurer.
Yesterday when the stockholders met
10 elect, the proxies presented by Mr..
Wynne were challenged by the faction
hcaded by Frederick $. Dudley and
Robert r. Tuttlc. and p general pro
'c-. demanding that all proxies be
brown out, both those presented by
rhc wynne and the Dudley groups. was
IIcd by Robert l.. Mcneil. represent
rnC Independent" stockholders.
The tellers. however. after hearing
arzuments, determined that tho proxies
-hould be voted, and the ticket placed
~ the field by Mr.. Wynne and his
friends received 112,5tj votes 70 4s.4e0
sst for the Dudley-Tuttle tic&ct.
The full new board is CONF osed Of
Eobert T. wynne, president. Fred /
nuhois first vice president and treas
lrer: Chester Tomson. New Jersey: H.
" warrenfcItz. Maryland; Godfrey
C'reyke. Frank c. Dinges, virginia
Daniel V. Chisholm. John Lewis smith
George F. Livingston, Gustave 70
Rausch. Thomas r. Hamer. Idaho;
James $. Easby-Smith. John P. Collins
Missouri. H G. Barton, Florida; George
NJ FdsaIl. New York.
Whether Messrs. Tuttle and Dudley
will endeavor TO further push thelr prI
test and resort to court action could
NOT be learned this mornin-. as both
lore out OF the city Mr.. Mcneil, how
ever. said that he had no plans for the
present. but purposed to walt and see
whether Mr.. Wynne and the new board
nf directors conduct the company
bIsiness on a sound and profitable
basis.
Mr.. wynne declared that so far as ne
- ,bc neu officers are concerned
there will be no demonstration OF feel,
ing toward those who have opposed
them, hut efforts will now be turned 10
promoting the interests Of tho COM