The Washington times., 1915-04-11
Charges Made by Representa-
tives Of Trust Company In
terests Denied.
SIMPLE UNION ALL WANTED
State Institutions May Join Sys.
tent Without Having to Get
National Charter"
Rx LuDSON c. WELLIVER.

There is no effort. campaign. or pur-
pose on the part Of the Federal Re-
serve Board to compel State banks and
trust companies to give up their State
charters and become national banks.
Representatives Of some of the trust
company interests have lately charged
that the Reserve Board entertained
such a purpose, and was engaged In
bringing pressure to beaS on these in
stitutions, with intent to compel them
to nationalize. 1t can be said that such
Legations, which have been made In
connection with the consideration OF
legislation at some Of the State capitals
this winter, are regarded as unfair: and
further. that some Of the people COM
cerned with the administration Of the
reserve law consider that some or the
trust company interests have been mar
row, selfish, and inconsiderate In their
attitude.
The Federal Reserve Board desires
that the banking strength OF the coun-
try shall be unified under the, reserve
this attitude, the board insistently de-
MES any wish to compel the state
banks and trust companies to become
national institutions. The law opens a
way Tor State banks and trust COM
panies to be admitted to the Federal
system without becoming national
banks, and 1t is the ambition of tho
Reserve Board that they shall do this.
Places Couldn't Be Filled.
Far from wishing that all classes
of banking institutions be compelled
to enter the Federal system, II Is
realized in Washington that the state
banks and trust companies occupy
place in the country's banking system
that the national banks. with diner
ent powers and greater Limitation,
could mot advantageously fll. The
realization of this fact Is strongly
emphasized on behalf of the reserve
board; and 1t is added that there 10
every confidence that when the whole
situation is understood the state ana
trust institutions will be FOUND ad-
herring to their State charters, while
they will progressively become more
and more disposed to join the, reserve
system in the way Congress mas pro-
vided.
L
that the State government has con.
Germ to prevent the disintegration or
it's State banking SYSTEM This CON
cern Is alleged to be based on the
fact that the new Federal system Is
experimental, and also the fact that
the State derives large revenue from
the taxation of State institutions.
while the nation gets the taxes from
national banks. This argument Is
secuted by reserve Board authorities
he a
the slightest danger of the State es-
adjustments giving up the broader
and more profitable powers they eN-
ercise under State charters.
Misunderstanding Arise.
Undeniably, however. misunder-
standings have arisen; and for some
time the reserve board has been busy
giving out~statements explaining its
attitude. The situation has grown
acute enough te warrant a very care
full explanation of the facts in the
matter.
The Federal reserve act authorizes
the reserve board to admit State
banks and trust companies to the Fed
eral system. provided the State laws
permit, and on condition that these
institutions subject themselves to the
supervision. examinations. etc. of the
Federal system.
On the Otner mana, II authorizes the
reserve board to grant to national
banks the authority to do certain
features of TRUST business, as acting
as trustee. executor, and administrat-
orr and to register stocks and bonds,
Many national ba nks have been eX-
tended these rights, but in some States
the banking laws required amendment
before national banks could enter this
business. Thus there were needed a
good many changes in State laws II
State institutions were thus to be
given the right to get into the Fed
eral system. and if national banks
were to be free to exercise the pow
ers of executor, etc.
II has been largely in connection
with consideration of these changes In
State laws. In a good many States
that the misunderstandings have
arisen. q .
At Albany, for example. when tho
banks committee of the senate con