The evening herald., 1918-05-02
IMPORTANT CHANGES
IN BANK LAWS ARE
BEING CONSIDERED
Several Measures Relating to the
Federal Reserve Are Pending in
House; Deal With Variety of
Subjects.

~ Assoelkrep pRrss

Washington, May e-1mportant
| changes in the federal rrserv
bank laws are pending In the house.
They deal with election of directors,
permission for national banks 20 act
IN iiduciury capacities. authority to issue
new denominations of federal reserve
notes, reserve requirements and other
matters vitality affecting banking opera.
tions.
All these changes are proposed in q
bill based on administration recommon.
dations and have been favornbly re-.
ported from the banking and currency
committee by Representative Phclau of
Massachusetts. Under the provision Of
the bill the present law t. % be- mod.
fled so as 20 leave 90 the discretion Of
the federal res erve board the grouping
Of the member banks of each district
into three general groups or divisions
without the pres, NJ requirement that
each group shall contain us nearly az
may be one-third of the aggregate NUM-.
ber of the banks of the district. The
purpose of this modification ir to make
as secure a. possible fair and equal
representation ON the directorate of tho
federal reserve banks for each group of
banks, the large, medium sized aud small
banks.
II alq0 proposes 20 replace the present
ballot method of clecting district re-,
serve clector, by Il provision permitting
each member bank. 30 authorize It's pres
ident or other officer TO east its vote
in such elections The aim is 10 obtain
wider participation by the banks iu tho
election uf federal reserve bank GI.
rectors.
National banks now uct i'm Gduriarv
capacities when not in couttuycutiou Of
state or local laws The bin extends
these dducinfy capacities 50 as 90 iu.
cludc guardian of estates, assignee re-.
ceivcr, committee 81 estates of luna.
ties aud other Gduciufy capacities per
mitted 10 state banks. trust companies
or other corporations which compete
with national banks under the laws ~
the state iu which the particular no
tionul bank making application i- lo.
Gated.
Issue Of federal reserve notes in de
nominations OF $500, $1,000, $4,000 and
10000 in addition 90 the denominations
under present law, the largest ot which
is only 500, is proposed by the bill
Banks are constantly seeking notes Of
larger denominations and there are daily
Withdrawals of cold certificate. from
the federal reserve banks. II BE- as
serted that federal notes oi large 40.
nominations would serve the purpose usI
well us gold certificates and n the
larger denomination were issued. 1r
cordiug 20 the currency committee, tho
federal reserve banks can puy out such
federal reserve note. and by holding
their gold certificates conserve their all.
important gold supply.
\ practice whereby any officer Al
rector rmpluyc or attorney of bank
snpulate- for, or receives, commits
sion or some other thing ot value for
procuring for someone cl-e lnuu or
the purchase or discount Of paper or
similar obligations h. o. be- prohibited
under the bin The payment of n
greater rate Of interest 90 any director.
ohicer attorney or other omploye than
10 any other dopositor, is prohibited.
Tho bill cmbodies penal sections rclut
ing o. the over ceriilcntion ot chccks.
emhrzlolmcut, abstraction ar Wilful mis-.
Application Of moneys. funds ar credits
ot federal reserve hanks boy their Of.
hcers agents or employees and 10 false
.euines hy them. While this pcnaliyu.
iion nov exists us 20 national banks.
thtyr are uu present laws covering the
subject in iederpl reserve banks,