Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-01-23
EVANGELICAL AND OTHERWISE


By I. A. FLEMING.
While the local clearing house asso-
citation has not taken action on the
proposition Of the New York organi-
cation to undertake the collection.
under certain conditions. Of all checks
drawn on Washington banks sent to
New York. at par. leading bankers do
not hesitate to express the BELIEF thar
the proposition will be refused.
Should this be the case. some bankers
believe that it will be a mistake. al
though, from the viewpoint Of profits
on exchange collected by local banks.
it Is easy to SEQ why they may now
refuse that which they sought Few
years ago-the making of Washington
a par point with other important cities
Of the nation.
1t Is recognized, even by bankers
who are opposed to the acceptance OF
the proposition, that Washington. the
head center Of the nation. the seat OF
the federal reserve board and OF the
government, should not only be par
point, but that it should be given
regional bank or at least a branch fed
eral reserve bank.
Checks drawn against deposits In
Washington banks would be payable at
face value anywhere in the United
States II the New York proposition was
accepted.
Part Of the profits from carrying a
portion of their reserves where IL VII,
earn interest has been taken a"ey
by the law requiring g. percentage OF
reserve requirements to be carried WIN
the federal reserve banks; bankers also
fear that they may be forced into ing
federal reserve clearings system anu
thus lose moro money now acquires
by collection fees and interest on pal
ances carried with trust companies ana
other banks.
Because of the fact that there is more
money in Washington than the legsu.
mate demand requires and this fact
keeps bankers hustling to Keep thelr
funds working full time. II there was
a larger demand from people ana cor
porations entitled to credit consloera-
ton, the keeping of larger reserves IN
their own vaults would not be consid-
cred such q hardship.
These are the reasons why many
bank officials are opposed to the propo-
Association.
Guaranteeing Bank Deposits.
committee has favorably reported a
bill authorizing national banks to
avail themselves of state laws for the
guarantee of bank deposits.
1t has been held that it would require
congressional action in order that ma
tional banks would have the right to
guarantee deposits.
That the measure has the approval of
the Senate committee does not mean
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Many national bankers are bitterly
opposed to the Oklahoma Nebraska
idea Of guaranteeing deposits. They
call attention to the record OF loss
tionaI system since its Inauguration.
less than 1 per cent. as an evidence
that is is unnecessary: these bankers
also contend that with the double
of the controller of the currency. bank
deposits are safer now than ever be-
fore in the history Of the nation.
But If a national bank in one city adj
and such iduciary bonding corpora
tion." it is believed that others in the
same city will have to follow suit.
One banker. when questioned on the
nothing more than an enormous boost for
the fiduciary bonding companies
The measure would have no direct ef-
feet on Washington as there are no local
permit banks in the District to guarantee.
Senator Owen OF Oklahoma is the chair
man Of the banking and currency COM
mittee in the Senate, and Oklahoma and
then Nebraska were the original advocates
Of the guarantee law.
Local bankers have no hesitancy in say
ing they are opposed to the measure. but
that 1t may be necessary in some places
to permit national banks to compete with
state institutions operating under the sys-
tenn, but they say they know of no such
competition in which national banks are
not holding their own.
An Interesting Case.
The state corporation commission of
the state OF Virginia approved Of a
proposed issue Of $4,000 first mort
gage bonds of the Washington and
Old Dominion Railway Company, the
proceeds of the sale of which were to
be used entirely in the state Of Virginia
and largely in electrifying the line be-
tween Herndon and Bluemont, both
points being in the state of Virginia
The registrar of the said bonds, the
American Security and Trust Company.
brought up the question as to whether
or not the public utilities commission
of the District Of Columbia claimed
control over the security issues of the
road.
Whereupon the railway officials ad-
dressed a letter to the public utilities
commission, November %, 1914, in
which the facts in the case were stated
at length: the incorporation of the
company in Virginia. and that the bonds
in question were to provide funds in
solely in the state Of Virginia
This letter was referred to the gen.