Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-05-17
RESERVE BANK WILL BEGIN
CLEARING CHECKS JUNE |
Governor Scay Says New Service IL
Widely Endorsed in Fifth
District.
MANY BANKS GIVE APPROVAL.
Sufficient Number Of Endorsements
Have Been Received to Make Ger
tain Establishment of Collection
System-Ncw Service Described

! June / has been determined upon by
| the authorities of the Federal Reserve
| Bank of Richmond as the approximate
| date for the inauguration of the clean
| ing plan. under which the local bank
| will undertake as an additional service
tho collection of checks on member
! banks In the Fifth Federal Reserve
| District
With the view Of ascertaining tho
sentiment OF the member banks on the
| proposed collection plan, Governor
| Scay, OF the Richmond Federal Reserve
| Bank, addressed communication to
each of the members inviting them to
| express their opinions. The bank
were asked TO reply by May 14-last
| Saturday.
| "A sufficient number of Endorsements
| from member banks in the Fifth Dis
| trict has been received TO make Ger
tain the csta blishment of this service"
said Governor Seay. yesterday. we
did not expect to receive 4 reply from
every bank. Endorsements are still
coming in and l feel certain that as
| soon as the system is inaugurated large
numbers of the banks that have as
yet made no reply. will follow the cx-
ample of those that have approved the
, plan and give their Endorsement
NEW SERVICE WILL
ENJOY GRADUAL GROWTH
The new service will grow gradual
ly. 1t would not even be desira b e
| that all the member banks of this dis
trict should begin as soon as the sys-
tom in instituted to clear through the
Richmond Federal Reserve Bank The
volume of business would be so large
that it would swamp us. Collection
arrangements are usually of long
standing and changes in them will
naturally take pace gradually"
bulletin prepared by Governor
Scay, describing the collection ma
chinery that will he installed by the
Federal Reserve Board and in par
ticular the system that will be inau-
gurated in the Fifth Reserve District,
has just been sent TO all the member
banks. II points out the most obvious
benefits that Will flow from the new
service.
The chief evils of the collection
business as now conducted" says Gov
ernor seay. are excessive change
charges which usually fall upon tho
wrong parties to the transaction, and
the indirect routing of checks In or
der to avoid these exchange charges
involving paying of interest and draw
ing of checks against uncollected funds
and also involving an immense float
Ing fund'--estimatcd ut several hun
I'll GU iHiiiionS-llnprOpcrly counted in
bank reserves In some cases and In
other cases kept out Of reserves un-
duly by this circuitous routing.
BANKS THAT JOIN SYSTEM
WILL HAVE ADVANTA Gle
ut Is quite plain that any bank
which can give TO it's depositors the
privilege Of having stamped across
their checks collectable at par through
the Federal Reserve Bank" will have a
decided advantage for the ACQUISITION
of new accounts over another bank
in tho Same locality which does not
enjoy this privilege. II is also obvious
that any business community possess
ing this privilege will have a distinct
advantage over another where il does
not exist
I'm joining the collection system
members will not become obligated to
send us items on other members but
will. Of course. be bound by the agree
ment to provide us with funds for
payment at par of all checks received
upon them. Present connections of
members. whenever quicker in service
or for any reason moro satisfactory or
advantageous. may, of course, be con-
tinucd.
The more members that Join the
system the more satisfactory will it
work. for all concerned, and since it
is an essential and inevitable part of
the Federal Reserve System IL will he
intensely gratifying IL our members
will show that loyal cooperate spirit
which they have demonstrated at each
stage of development. and take the
lead in perfecting tho most complete
district collection plan in operation. y