Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-12-13

tion of various situations that have
arisen from time to time through
the course pursued at Washington,
which is inferentially contrasted
with that of the Philadelphia and
Cleveland reserve bank officials.
The report says in part:
Part of our State is included in
the Third Federal Reserve District
in which the Federal Reserve Bank
is located at Philadelphia, and part
in the Fourth Federal Reserve Dis
trict in which the Federal Reserve
Bank is located at Cleveland. 1t is
pleasure to record the cordial re-
lations existing between the depart
ment and the officers of the two
Federal institutions. The admission
of State financial institutions to the
Federal Reserve System and the ex-
ercise of fiduciary powers by the Ma
tional banks has naturally led to an
overlapping of powers by the Fed
eral and State administrative agen-
cies. An arrangement of mutual
advantage has been made with the
Federal Reserve Banks whereby
joint examinations are made OF
State banks and trust companies be-
longing to the Federal Reserve
System. The plan so far has been
carried out harmoniously and, we
believe, will in the future effect a
considerable economy, and, at the
same time, relieve membership banks
from the annoyance resulting from
numerous examinations. If the Ma
tiorai banks should in the future
enter extensively into the tiduciary
business. doubtless some such SINH
lar arrangement can be effected for
joint examinations.
Relations existing between the
individual banks of the Federal and
State systems are cordial and har-
monious. They are mutually inter-
dependent and it is essential to the
healthy existence of our financial
system that nothing should be per-
mitted to disturb this happy situa-
tion. The attitude of the State
banks toward the National banks is
best expressed by the fact that the
State banks and trust companies of
the entire country are said to be
carrying on deposit with the Ma
tional banks the vast sum of ST.
100000.
II regret that am obliged to
make note of the hostile attitude of
the Comptroller of the Currency to-
ward the State Institutions. In one
instance in our State he sought to
use the extraordinary powers which
were granted him under war neces-
sites to coerce a trust company to
convert into National bank, under
penalty of losing large railroad de-
posits. We believe this was not an
isolated case, but was indicative of
n policy to be inaugurated toward
State financial institutions generally.
This case received wide publicity and
general condemnation, as n result
of which this line of coercion was
abandoned. However, the Comp
troller continues to issue, from time
to time, numerous bulletins, which,
either directly or by innuendo, reflect
on the State institutions. over this
ill-advised action all we can do is to
give voice to the feeling of indigna-
ton which is common to all State
banking departments and State
banking institutions, and await the
time when the important office of
Comptroller win be administered in
Il more generous and judicious spirit.
I'VE believe the Federal authori-
ties have adopted Il short-sighted
policy in restricting all deposits,
over which the Government exercises
control, to National banks. The in
justice of this course is keenly felt
by State bankers who, through the
period of the war, gave so generously
of their efforts and means to the
support of the Federal Government.
Furthermore, the State banks and
trust companies contribute, by way
of taxes, to the support of the gen.
eral Government equally with the
National banks. There is a wide
spread feeling that this discrimina-
tory action of the Federal authorities
is designed to drive State institu-
tions into the Federal Banking Sys-
tenn. 1t is hoped that the Federal