New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-04-29
Small Bankers
Unfriendly to
Collection Plan
Checks Made Non-Negoti-
able by the Use of
Rubber Stamp

Unwillingness on the part of small
state bankers not members OF the Fed
eral Reserve system to cooperate in the
effort being made to establish plan
for collecting checks at their face value
was disclosed in a statement issued
yesterday by officials Of the Federal
Reserve Bank Of New York.
In the last few days the local Re
serve institution, it is said, has re-
ceived for collection checks drawn on
state banks in this district on which
have been stamped the words mot pay
able through an express company"
The effect Of this is to render such
checks non-negotiable and, according to
the statement given out at the Reserve
bank. "seems 10 be "A result of the use
bv the Federal Reserve Bank of New
York Of express companies TO collect
checks on certain small state banks
located principally in the western part
Of New York State. This stamp is be-
ing used by some Of them in the expec-
tation that they may be enabled thereby
10 continue TO pay checks drawn upon
themselves at less than their face
value, TO the detHment OF business men
and others who receive such checks.
To Remove Restrictions
The Federal Reserve system, it i.
pointed out, is endeavoring to make the
payments for trade between one sec.
tion Of the country and another as un-
restricted as the trade itself by remov-
ing as far as practicable the basis for
the exchange charges which have hith,
erto been barrier TO the unrestricted
flow Of funds between the various parts
Of the country.
Through the cooperation of the sub
treasures and through its gold settle
ment fund in Washington" the state
ment continues, "the system has beer
enabled during the past two years u
settle immense balances between the
various sections of the country without
either shipment of currency by Fedora
Reserve banks or shipment of gold BY
sub-treasuries. Should it be necessary
at any time through the operation Of
this fund for enc sub-treasury TO shiF
gold TO another the cost OF such ship
ment would be absorbed by the Reserve
system in the interest of unrestricted
countrv-wde settlements.
"ln the same way the basis for eX
change restrictions is being removed
from local settlements by the Fedora
Reserve systems policy Of absorbini
the cost of whatever currency ship
ments country banks are obliged u
make in settlement Of checks draw
upon them, thereby enabling then
without cost TO settle such checks a
full face value.
Most Banks Adopt Plan
"Of the total banks in the New Yor'
Federal Reserve District, 99.6 per cen
using figures on the basis of thei'
resources -are paying checks draw
upon them at their full face value. TIT
collection system of the bank is there
fore so nearly complete that IT Will b.
carried to completion with the leas
possible delay. In order to accomplish
this result and thereSy give to the Gus
toners of all banks. whether or no
they are members OF the Fedora Re
serve system, the benefits of direct
economical and scientific method of col
lecting checks. special agencies Will b'
promptly established wherever neces
sary TO handle all checks carrying re
strictive stamps"