The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1918-05-01

Important Changes Proposed i'm Bill
Now Pending i'm Congress.


Washington, April 2G.-Important
changes in the federal reserve bank
laws are pending in the house. They
deal with election of directors, per-
mission for national banks to act as
in fiduciary capacities, authority to
issue new denominations of federal
| reserve notes, reserve requirements
and other matters vitality affecting
banking operations.
All these changes are proposed in
a bill based on administration rec
concentrations and have been favor
ably reported from the Banking and
Currency committee by Representa-
tive Phelan, of Massachusetts. I'm
der the provision of the bill the pres
ent law is to be modified so as to
leave to the discretion of the Federal
Reserve board the grouping Of the
member banks of each district into
three general groups or divisions
without the present requirement that
each group shall contain as nearly as
may be one-third of the aggregate
number of the banks of the district.
The purpose Of this modification is
to make as secure as possible a fair
and equitable representation on the
directorate Of the federal reserve
ranks for each group of banks, the
large, medium-siz and small banks.
1t also proposed to replace the
present ballot method of electing a
district reserve elector, by a provis-
ion permitting each member bank, to
authorize its president or other Off
Ger to cast it's vote in such elections
The aim is to obtain wider partici-
patton by the banks in the election
Of federal reserve bank directors
National banks now act in fduciary
capacities when not in contravention
OF State or local laws. The bill ex-
tends these fiduciary capacities so as
to include guardian of estates. as
signee, receiver, committee of estates
Of lunatics" and other fiduciary ca
pacities permitted to State banks,
trust companies or other corpora
tons which compete with national
banks under the laws Of the States in
which the particular national bank
making application is located.
Issue of federal reserve notes in
denominations of $500, $1,000, s5,-
600 and $4,000 in addition to the de-
nominations under present law, the
largest of which is only $1OO, is pro-
posed by the bill. Banks are con-
stantly seeking notes of larger de-
nominations and there are daily with
drawals Of gold certificates from the
| federal reserve banks. 1t is asserted
! that federal reserve notes of large
| denominations would serve the pur-
pose as well as gold certificates and
sued, according to the currency COM
mittee. the federal reserve banks can
pay out such federal reserve notes
and by holding their gold certificates
conserve their all-important gold
supply.
A practice whereby any officer di-
rector, employe or attorney of a
bank stipuates for. or receives, q
commission or some other thing of
value for procuring for someone else
loan or the purchase Or discount
OF paper or similar obligation is to be
prohibited under the bill. The pay
ment OF greater rate of interest to
any director officer, attorney or 9TH
er employe than to any other deposi-
tor. is prohibited. The bill embodies
penal sections relating to the overcer-
tlfcation of checks, embezzlement.
abstraction or wilful misapplcation
OF moneys, funds or credits of fed
eral reserve banks by their officers
agents or employees and to false en-
tries by them. While this penaliza-
ton now exists as to national banks.
there are no present laws covering
the subject in federal reserve banks