The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-07-29
Carter Glass Comments Sharp
ly On Statement Credited to
Democratic House Leader
If 5000 BANKS LIVE
BY EXTORTION IT'S BAD
Check Collection Charges Is
Characterized as Taking of
Property of Business Men
Without Compensation

Especial to The Richmond Virginian.)
Lynchburg, Va, July 2s.-Repre-
sentative Carter Glass. chairman OF
the Banking and Currency Commit
tee of the House, while at home here
tonight commented somewhat sharply
on published statements of Congress
man Kitchn. the Democratic House
leader. relative to exchange and check
collections by some banks In the
country.
Il have no knowledge" said MIR.
Glass. of any order issued by the
Postmaster-G which affects
check clearances, and hence l Will
not comment on something | know
nothing about. But If Congressman
kitchin intends to make a plea for
the old system of extortion practiced
by certain banks under the Ruise of
check collection charges. l take direct
issue with him. The Federal reserve
act seeks 10 abolish that scandalous
system Of financial }echery and II is
amazing to ind the Democratic leader
OF the House OF Representatives, who
voted for the act apparently seeking
10 justify an arbitrary tax on the
com nlerce and industry Of the United
States which simply amount TO TAX
ing the property of American bust
ness men without compensation.
Put End to Extoruon.
To assert. as MIR kiichin is quoted
p having done. that four-fifths Of the
State banks dertves fifty per cent OF
their net income from check collec-
ton charges is 10 furnish startling
illustration Of putting an end to such
extortion. Think OF il! Thousands
OF banks existing for no better pur-
pose than to discount and to that ex-
tent 10 burden the checks given by
the merchants. farmers and business
men on deposits kept by them with
these banks.
The very statement OF the propo-
sition carries it's own condemnation.
Banks that exist only TO get some
thing to which they have no defensi-
Bile title are not banks. they are
money sharks. and 70 put a stop to
their exActions viii not hurt any
community. II there are eight thous-
and hanks. as Mr.. Kitchin asserts II
may be replied that there are con-
stderahly over eight million people
in the United States who do bushes
by checks and who should not have
their deposit accounts preyed upon.
II Is said that 90 per cent OF the bust
ness NJ the United States Is transacted
through our system OF checks and
drafts. rather than by use OF cur
rcncy. II is this great volume OF
bushes that Mr. Kitchin seems will
ing TO have taxed by extortionate
check collections
No Excuse For Existence.
TT does not help the matter 10 say
that banks doing this business are
State banks A tax on business is A
tax on business. whet her levied by a
State or national bank: and. accept
ting Mr. kitchin's own figures, this
tax has been applied with such
severity as to have furnished so per
cent of the net income OF eight thous-
and banks. A bank which admits that
so per cent OF its net income Is de-
rived from taxing checks on the con-
structive interest theory has no ex-
cuse for its existence. II should bA
put out of business. and the quicker
the better. Public sentiment has
compelled an abandonment of the
system in larger business communi-
ties Of the country and the Federal
reserve act was intended TO force II
out Of existence everywhere"