The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-09-08
BANKERS URGE FAIR
TREATMENT TO R.R.'S
W. f. Knox Says Savings
Bank DcpoSitOrs Are Part
nrrs i'm the Business.


SEATTLE. Wash, Sept. THE seri-
Gus work Of the American Bankers As
ISOLATION convention began this morning
when the savings bank section met at
the Moore Theatre to hear several dis
tinguishcd men discuss the needs of the
railroads OF the country. william
Sproulc. president of the Southern Pa
cihc Railroad Company. spoke on RAJ
roads" urging the absolute necessity for
better treatment of these corporations
by the public aud the Government, while
Or. John Wesley hin, speaking on the
subject "Thc People presented in a
new light tn" necessity for real "regu-
iation" inJtcad Of "-atrangulatlon."
r.. Shorreck, president Of the North
west Trust ard safe Deposit Company
OF Seattle, welcomed the members of
the trust company section of the ma
tiona organization at the Washing
ton Hotel. One of the principal features
of the day was the Organization Of the
new national bank section of the ma
tional association.
william T.. Knox. president OF the
savings bank section and comptroller of
NAN' i'N'iN ~ fhANN aN'" '
urged fair treatment OF the railroads AS
a protection to bank depositors. He sad
In part
whether he realizes II or not. the
aying bank depositor has a vital in
tercst In the welfare OF the railroads.
There are IN the United States 10. 5O2.-
AS aving bank depositors. every one
OF whom Is to some extent n partner
of the railroads because OF the fact
that the vast amount of SS59,6O 1865
is invested by the savings banks in
railroad bonds.
Every law that is passed affecting
the railroads has an effect upon the
investments held by the savings banks
ms the trustees Of the people. II this
fact were kept clearly in Wow by our
legislators 1t would go far oward hav-
ing "A %Stcadying effect upon them. with
beneficial results FOR all parties con-
cerncd.
at ~ quite proper to eliminate, and
w. ARE eliminating the abuses of power
and privilege that have In the past
crept into the management of the rail-
roads. But. on the other hand. we
must not attempt. while abolishing the
privileges Of the few. to embark upon
what has been called the impossible
and incquitablc task of creating privi-
hges for the many.
Fair Return for Service.
1.-THE present controversy between the
Post Office Department and the rail-
roads over the parcel post question is
a case In point. 1t would seem to an
impartial outsider that the question of
fact. as TO whether the railroads are
being fairly paid or not, ought easily to
he arrived al. and | totally misjudge
the temper of the American people If
they do not insist that the railroads
Gin case II - proved that they are I'M
derpaidb b. suitably compensated. The
American people has no desire to ac-
cept any service for which II does not
maxi AN adequate return"
George L.. Edwards. president of the
Dollar Savings Bank Of New York, dis
cussed the liquijity of loans and invest
ments. He said in part:
The entrance OF the Federal reserve
bank into our financial system did away
with one unfortunate n~ecessity-the
clearing house certificate. That other
unfortunate neCeSsity-notiCe OF with
drawal from the deppsitors-should have
passed away 10y virtue If the same meas
ure.
".Any form of security which woull be
acceptahic by the Federal reserve bank
as a basis of Federal reserve notes
would be liquid. The Aldrich- Vreeland
act permitted the issuance in the fall
OF 1914 Of about S36S. 0O0, 900 in cur
rency. OF this amount S54,230. 900.
or about Il per cent. OF the total, was
secured by state. county and municipal
bonds, Much of the currency issued
against these securities was obtained in
directly 10 assist in financing savings
bank requirements.
THE Aldrich-Nrecland act has ex-
pired and these high class obligations
do not now demand the privileges to
which .yrninant1N gufa nuag,apnanta p
entitled. Securities OF this class are de-
cidedly non-liquid, and In the event of an
emergency would have to be sold at a
sacrifice in order to obtain currency.
"As an aid in arriving at a plan It
seems essential:
First; That the Federal reserve
banks should he given power to accept
the collateral of aving banks for cur
rency. This may be done through MEM
Der banks authorized to act as inter-
mediaries. Second That State laws
should he enacted permitting investment
by savings banks In certain securities
acceptable TO the Federal Reserve
Board"
The utilization OF the Federal Reserve
act In clearing house operations was
discussed 10y O. Howard Wolfe, assistant
cashier OF the Philadelphia National
Bank, in the course of an address before
the Clearing House section lie said:
Clearing House Operations.
The plan | would propose is an
adaptation Of one already in use in
several Of the smaller clearing houses.
The debtor banks draw their drafts on
q reserve agent In the nearest reserve
Or central reserve city TO the order of
the clearing house manager. The man
aaer sends these drafts TO the depository
bank in the reserve city and issues his
drafts against the deposit in favor Of the
creditor banks.
while the Federal Reserve act makes
no specific provision for a deposit by a
clearing house manager, consideration
must be given % the fact that this
official merely represents an association
OF banks already-for the M st part
members OF the system. I do not hesi-
tate TO say that such deposits would be
accepted by the reserve bank acting as
a clearing house depository. II would
he necessary, or at least desirable. for
debtor non-member banks b. draw upon
clearing house or member institutions in
the city where the reserve bank Is To-
Gated, although member banks would
draw only upon the reserve bank. Since
state banks may continue to carry re-
serves with other banks, there would
arise NJ question as TO the s undness
OF the plan"
Henry NJ, Campbell OF Detroit dis
cussed the question "Can Congress Con-
fer Trust Powers Upon National Banks?'
He said in part:
u have been unable TO discover any
general demand on the part Of the peo-
pie Tor this surrender of their right to