Evening star., 1915-02-19
ONE MILLION CAPITAL
MAY Be NECESSARY
Are Banks in District Governed by
Code in Assuming Trust
Functions2
No Life in Security Markets-Gov-
ernment Deposits Remain in Ma
tional Institutions.
BY I. A. FLEMING.

An interesting question has developed
in connection with the privileges
granted banks that are members of the
federal reserve system to engage IN
functions heretofore pertaining only to
trust companies. such as acting as ex-
ccutors under wills and acting as trus-
tees and registrars of stocks and bonds
1t is specifically stated in the code of
the District that trust companies shall
not be organized with a capital of less
than s1.oOo.00o.
II is further specified:
Section 1iT No corporation or COM
pany organized by virtue of the laws
of any of the states of this Union ana
having it's principal place of business
within the District of Columbia snail
carry on in the District of Columbia
any of the kinds of business named IN
this subchapter without strict compI-
ance in all particulars with the pro-
visions of this Subchapter for the gov
ernment of such corporations 1oIHieu
under il and each one of the oihcerS
of the corporation or company so OF
Tending shall be punished by me not
exceeding $1,000 or Imprisonment no,
exceeding one year, or by both nhe ana
imprisonment. in the discretion Oh the
court
Inquiry was made of number OF Of
fcials of the Treasury Department, tne
federal reserve board being in session
at tine time, with the result that no
positive opinions could he obtained on
the matter in question, although IL was
generally considered that the federal
reserve law obviated the necessity Oh
compliance with the code regulation
The actual provisions of the federal
reserve act relating to the assumption
of these powers, as mentioned ABOVE
by member banks have left no DOUBT IN
hon
tional bank in the District of Column
bia can exercise these powers unless 1t
has a capital of over S1,ooo.oOO
Here is the law on the point:
Section IL, federal reserve law, para
graph k
10 grant by special permit to ma
tional banks applying therefor, when
not in contrayention of state or local
law. the ri-ht to act as trustee, ex-
ecutor administrator or registrar of
stocks and bonds under such rules and
regulations as said board may pre-
scribe.
Regulations Issued.
The federal reserve board pro-
vided a form (No. CID for banks max
ing application for the exercise of the
trust company powers-simply pre-
scribed resolution by a board of direct
ors, giving the name of the bank, date
of meeting. statement of desire to
act either as registrar, trustee, exec
utor or administrator. one OF all the
functions. and empowering the presi-
dent, vice president, cashier or secre-
tary to file the application with the
board, which may then grant the privi-
legeS asked
Government Deposits.
Government deposits are not to be
shifted from national banks to the
federal reserve banks until the latter
institutions do more general business
The federal reserve act provides that
the Secretary of the Treasury may
shift the government funds in national
bank depositsaries to the federal re-
serve banks at ris discretion, and last
fall, tits said. Mr.. McAdoo was on the
point Of taking advantage OF this
power.
~ has been determined that this
money shall not move while vast sums
lie idle in the vaults of the tWlve fed
eral reserve institutions: Not oniy is
this given as the reason for leaving the
government funds where they are, but
il is stated also that the reserve bakns
need still more time to acciiInate tnefn-
selves to their new neld pelore ldhihS
on additional duties.
Moreover the government is today
obtaining per cent interest on all
deposits in national banks, "hlie the
reserve or regional DankS are not III d
posf,ion 10 employ their deposits 10
good advantage
Treasury Statement.
The disbursements OF the treasury
pepartment for February II exceeded
the receipts by s2o.617. making the ex-
cess disbursement for the fiscal year,
10 that date, s9e.91s..67, as compared
with excess disbursements of s46,-
ss2.705 for the corresponding date OF
the previous fiscal year
Washington Securities.
There was very little business on the
afternoon session of the Washington
stock Exchange today, traders here as
in New York and other financial CEN
rers waiting for Developments of the
next few days
few shares of Washington Railway
common stock sold at ss12 and pre-
1erred at s4ia TO s4aa. The only other
stock transaction was in Graphophone
preferred, which advanced points to
10.
Capital Traction 5s were wanted at
1051. Gas 5s at 1o4 and Potomac Elec-
trio Consolidated IS at 9S2s.
The bid and asked prices on Wash
fngten Gas were 72i. and 12hs: no