Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-09-05
More About Collections.

There Is vet another feature to the
collection question now being consid-
cred by the banks and the federal re-
serve board. Many banks do not want
to Join the regional collectional sys-
tenn. The chances are that the fed
eral reserve board will force compli-
ance, to the loss of considerable profits
accommodating to the banks from this
field Of endeavor.
Banks that do a large collection bust
ness must perforce keep balances more
or less important with the banks that
| send them exchange for collection.
Balances in the central reserve cities
can be counted as part OF the necessary
reserves, but not SO balances with Bal
timore, Philadelphia and other points
outside of the central reserve cities
On such balances the banks owning the
funds receive 2 per cent interest, ano
the profits from the collections prob
ABLY average not more than l per cent
more on the funds carried with the
banks
The contention is made by bankers
favoring the regional collections. and
ultimately the interdistrict system
that the balances carried in the non
central reserve city banks, II employed
in the regular course of business at
to per cent, would bring In a rela,
lively larger return than that produced
by collection fees. plus interest on bal
ances.
There is still the third feature of
clerical hire, postage. correspondence.
etc, and frequently the transfer of
funds. that add to the cost of the col
lection of many checks.
All these things will be considered by
the federal reserve board in reaching
its conclusions as whether to make
entrance into the collection systems
optional or compulsory.
Want a Ruling.
It win soon be time for annual cleo
lions of officers and directors for ma
tional banks and other fiscal instttu-
lions. The Clayton law provides that
on and after October 1, 1915. no en-
ploye, officer or director of a bank can
hold positions in more than one bank
Ing institution.
During the past week a local bank
official asked a Treasury official Wheth-
err or not banks could elect their Off
GERS next January for the year 1916.
and was answered in the negative, but
with the further information that the
decision was not official.
It would seem to be for the Depart
ment of Justice to render an opinion
on this matter in the near future, de.
spite the fact that the language OF
that it was the intention of the formu-
lator of the bill that officials holding
office October 1. 1915. might continue
without change until their terms of
election had expired.
However. the judicial Interpretation
will be the accepted ruling, and the
sooner the banks know exactly what
Is expected Of them and whether or
not officials can hold Office after Octo-
Der 16, 1915. in more than one insti-
tuition, the less the inconvenience.
In New York, Philadelphia. Chicago
and Washington revision Of the list of
the directors of practically every i'm
portant bank in the cities will be nee
essary. when the Clayton law becomes
effective.
Many bankers have no idea as to the
choice of bank Of many of their di-
rectors now connected with two or
more institutions, but when the time
for separation comes the choice must
be made.
What's the Actual Va1uep
In an opinion involving the sale of
the Washington Trust Company of New
York city to the Corn Exchange Bank.
Justice Greenbaum of the New York
Supreme Court has made a ruling which
Is novel in law and of considerable in
terest to holders of the stocks of banks.