Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1916-07-17
WILL ACQUIRE SITE
FOR PERMANENT HOME
Federal Reserve Bank Directors
Have Many Offers Under
Consideration.
NEW CHECK-CLEARING pl
Will BE Given First Real Test To.
Day-Mccts With Opposition From
Country Banks, Which Have De.
rived Revenue From This Service

rived revenue From This Service.
! Definite consideration will probably
be given by the board OF directors n,
the Federal Reserve Bank of Rich
| mond, ut its meeting on July 81. Ia
the matter OF acquiring a site for tbe
permanent homo OF the bank wh;c,
is to he built In the near future A
dozen or more sites. more or less suIt.
able. have been offered tho bank an
thoritics. and an early selection is 70 :
gardcd now as probable
AS soon as the site is selected tho
board OF directors will be rc,dv 70
proceed with the preparation or a
rough program to be used nv con-
pctinE architects as a guide i'm mak
ing up their studies of tho nronosod
building Dallas alone, of the twelve
Federal reserve banks. has so far
housed its bank in home of it's own
Richmond will probably be tho second
reserve bank city TO take this stem
This week will sec the first nroc,,
cal operation of the now Federal re.
serve check clearing system that went
into effect Saturday. In accord,nce
with the recent order of the Federal
Reserve Board An addition of eight
VI ~" 'itcH was Hiaue saturday TO the
clerical force Of the Richmond Federal
Reserve Bank to handle the new busi.
ness. AS tho banks make increasing
use OF the system, 1t is expected moro
men viii have to he added Tho local
bank has now an Office force of ohout
forty.
FIRST TEST Will.
COME THIS WEEK
he hrst test OF tho new collecting
system viii come this week" said
Governor George J. Seay, OF the local
oahk' iast night While the system
Went into effect Saturday, there was
Of course. no business on the first
day. We look forward with confidence
to its successful operation. IL puts into
effect reform OF the greatest sig
niticancc."
inauguration of the new clearing
scheme and its results will be watched
with interest by all bankers for II
follows long and often bitter dis
cussion over tho right OF the Federal
government to do away with the
charges which many banks particular
~ the smaller country institutions
have been making for RENTING funds
10 other points. AT the recent state
bankers convention at Old Point Com
fort. tho hostility of the rural bank
crs 10 the new collection service was
instrumental in bringing about the
adoption of q resolution condemninc
the plan in so far as II contemplated
the ultimate collection at par OF coun-
try items. and requesting the Nir-
Einia members OF Congress to assist
In securing an amendment TO the Fed
eral reserve act in accordance with
these views.
NEW COLLECTION
SYSTEM Is OPTIONAL
The new collection system is op-
tional, since no bank is obliged 10 de-
post its items with Federal reserve
bank for collection. However, every
member bank must pay checks with
out any deduction for exchange when
these checks take their way through
the Federal reserve collection system
10 the banks on which they are drawn.
While member banks will be under
no compulsion to collect checks
through the Federal reserve bank
they Will be required, under the rul-
ing OF the Federal Reserve Board, to
provide funds TO cover ut par all
checks received from or for the ac-
count of their Federal reserve bank.
Member banks Will continue TO be at
liberty 10 make such collection ar
rangcments with other banks as may
seem 10 them advantageous. Such ar
engagements, especially between banks
located within short distances of one
another, II is believed, will still prove
TO be desirable.
AS a rule, the exchange charge for
coilection--a revenue which is consid-
banks and which they are loath to
give UPS such only in name. IT
would be more properly designated a
discount or service charge. II has al
ways been customary TO make n
charge for transferring funds current
in one community into funds current
in another community or distant dis
trict. This is the basis Of exchange
charges. and by most bankers 1t is
considered one OF the Legitimate
sources Of bank revenue
In practice many different methods
OF avoiding the charge and of substi-
tuting the draft for the check have
been adopted. but generally the re-
SUIT has been that the small country
bank especially, has in some way re-
! ceivcd its exchange"
ABOLISIIES TOLLS on
CHECK TURNPIKEs
The ultimate object of the new col
Getting system is to abolish exchange
charges. Governor Hamiin, OF the Fed
erai Rescrre Board. in his address 10
nc Virginia bankers last month, put
graphically when he said that the
plan is tho first important step In
I'''"''"hiHS TIC lOilS on Inc CueCN
urnpikcs-a device which, he said
was as out-of- date in the banking
world as II is in relation TO public
highways. Tho collection Of all checks
ut par. through the Federal reserve
system, he said. means the standardiz-
ns or This great banking function to
the ultimate benefit OF all
The actual cost of performing the
collecting and clearing service will be
accurately kept by the local Reserve
bank and viii he assessed monthly
against the member banks from which
items arc received. The cost at the
beginning is estimated to be ! LIZ cents
Tor each item handled, and this charge
has hcen fixed by the Federal Reserve
Board, to he imposed FOR the service
or clearing or collection rendered by
the Federal reserve bank" No service
charge viii be made for collecting
checks on Richmond
| The Federal clearing system will in
| 10 way interfere with the operations
OF the Richmond Clearing House AS
ISOLATION, which clears only for the
local banks. For the present at least