Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1915-03-25
FEDERAL RESERVE
Congressman Guernsey Discuss
es the New National Banking
Law-Few State Banks Have
Joined System-None in New
England
lBangor Commercially

Hon. +. y. Guernsey. congressman
from the Fourth Maine district. was
IN town Tuesday on Il brief business
trip and having only returned 4 few
days ago from Washington. he VAS
greeted by his many friends her.
Cong. Guernsey discussed briefly thu
congressional session Just passed ana
oppressed some views OH the Federal
Reserve bill passed hN this Congress,
whic'2 went INTO effect about s:A
months ago,
Unless there is q special session call
ed by President Wilson the congress-
man is home for the summer and Will
not return TO the national capitol I'M
Ill late in TIE fail. Unless some war
complication arises. I do not LOOK for
:. special session." nc said. The adj
minlstr lion is anxious to avoid any
trouble and Up to date it does not
look as il we would have any.
IN relation tc the session of Cor
,ress he said that he regarded the
I'ode,al Reserve act as one OF the
nacst far-reachin> pieces OF legislation
that had been put through by Con-
2rcss during the session.
1T is on rial Now" he said,
and has only been IN operation for
shout s.N months. While I believe
that the principle of it is right and
its effect very beneficial &c the business
OF the country it probably cannot be
fully judged until it has been in oper-
alton two or three wears.
Its national character will be large
~ dependent on the increase in the
number and the distribution of the
member banks joining the system. One
OF the difficulties with the national
banking system heretofore mas been
that the national banks We're gradual
" disappearing and going into liauida
ton and recognizing under state
charters which were more attractive as
state regulations are apt to be less
cnorous than federal regulations and
the scope of business allowed is great
er than that permitted under the ma
tional banking act.
~ II long ago ! made inquiry of
the Federal Reserve board to find out
il the national bon:ss which entered
the system at the time of the organ
ization. as all such banks We're requir-
ed to do or forfeit their charters within
o year were going into liquidation to
any extent now
In ether words | wished TO asccr-
tain if the system was considered by
them attractive enough to stop the
taking out of state charters.
Il found that some rising 81 banks
had liqufdated since joining the sys-
TEN. This is out of total OF about
900 national banks in the country
and that about an equal number Of
new national bank charters had been
taken out, so that the net change was
comparatively nothing.
Il was. however. impressed by the
statement in regard to the state banks
that had entered the Federal reserve
SYST EN-. At that time. two months ago,
very few had entered, and these that
had were small banks in the we.,t
None OF the New England state banks
had joined the system and out Of the
great number Of these institutions in
New York only one had joined
Undoubtedly the state banks are
delaying action until they can see the
system tried out fully, but perhaps
some may have come in since this re.
port.