The Bridgeport times and evening farmer., 1918-04-24
CHANGES BEING MADE IN LAWS
 GOVERNING BANKS
New Legislation to Cover Election of Directors and
 Regrouping of Banks.

Washington, April 24 - Important changes in the federal reserve bank laws are pending in the House. They deal with election of directors, per pission for national banks to act in Huciary capacities, authority to issue new denominations of federal re- serve notes, reserve requirements and other matters vitally affecting bank ing operations.
 All these changes are proposed in bin based on administration recom- mendations and have been favorably reported from the Banking and Cur rency committee by Representative Phelan of Massachusetts. Under the provision of the bill the present law is to be modified so as to leave to the discretion of the | aderal Re serve board the grouping of the mem- Der 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 num- Der of the banks of the district. The purpose of this modification is to make as secure as possible fair and equal representation on the director ate of the federal reserve banks for each group of banks, the large, me dium sized and small banks.
 It also proposed to replace the present ballot method of electing a district reserve elector, by a provision permitting each member bank, to au- s4a afh nffiaov to cast its vote in such elections. The aim is to obtain wider participation by the banks in the election of federal reserve bank directors
 National banks now act in fiduciary capacities when not in contraventior of state or local laws. The bill ex tenGs these fiduciary capacities so al to include guardian of estates, as signee, receiver, committee of estate of lunatics'' and other f1ducfary ca pacities permitted'to state banks trus companies or other corporation which compete with national bank under the laws of the states in whicl the particular national bank makini application is located.
 Issue of federal reserve notes il denominations of $500, $1 ,0o0, $500 and SIC, 1000 in addition to the denom nations under present law, the larg est of which is only 51O0, is propose by the bill. Banks are constantl seking notes of larger denomination and there are daily withdrawals 0 gold certificates from the federal re serve banks. It is asserted that fed eral reserve notes of large denomina tions would serve the purpose as we as gold certificates and if the large denominations were issued, accord ing to the currency committee tn federal reserve banks can pay or such reserves notes and by holdin their gold certificates conserve thei all-important gold supply.
 A practice whereby any officer, d rector, employe or attorney of a ban stipulates for, or receives, a commis sion or some other thing of va1AAe fc procuring for some one else a Noan ( the purchase ord iscount of paper ( similar obligation, is to be prohibite under the bill. The payment of
 greater rate of interest to any d rector, officer, attorney or other en ploye than to any other depositor,
 prohibited. The bill embodies pen sections relating to the over-certifc; tion of checks, embezz1ement, al straction or wflful misapplication
 moneys, funds or credits oe feder reserve banks by their officers, agen or employees and to false entries them. While this penalization no exists as to national banks there a
 no present laws covering the subje in federal reserve banks.