The Birmingham age-herald., 1920-01-18
.WELLBORN DEFENDS
 RULING PROHIBITING CHARGE ON CHECKS
Governor of Sixth Federal Reserve Board Replies to Letter From State Bank
 Superintendent Green

In calling upon the state banking in stitutions of Alabama to discontinue the practice of charging exchange on checks deposited with them for collection. NJ. S. Wellborn, governor of the federal re- serve bank of the sixth district, de- clares it to be the duty of bankers, state and national, to aid commerce in every way possible.
 Admitting that the banks will lose ing this psactice. he adds that the na- tional banks not only are forbidden to charge exchange, but they receive no interest on their reserve which they are compelled to carry with the reserve banks.
 sioner D. r. Green, a copy of which was forwarded to Manager Alex F. Walker of the Birmingham branch yes terday, MT. weliborn states his posi- tion and that of the reserve bank sys- tenn. as follows:
 Atlanta. Ga, January r.
 MT. D. F. Green.
 Superintendent of Banks,
 Montgomery, Ala,
 Dear MT. Green-I have your letter of January 6, and have read it carefully, and with a great deal of interest. for 1 am always glad to hear from you, and know your views on the banking stua- tion. l am quite well aware you are a very sympathetic man. You have a big heart and sound head, and I know that you are anxious to do something for your friends, who are state bankers. I. to, have sympathy for them because I know they will lose something by hav- ing to give up their revenue from ex- change. But have you thought about it that the national banks had to do the same thing? And besides they deposited their reserves with us, upon which we give them no interest. I know how you regard the federal reserve system and how you feel regarding the great ben efits that our country has derived
 from it.
 As democrat no doubt you are proud of the fact that it is the main and dis tjnct measure of accomplishment of the democratic party We should all pull to- gether in backing up the federal reserve system, and carrying out the plain in tentions of it's provisions, and one of the most important parts of it is par clearing of checks, but up to this time we have delayed putting this into effect, and therefore I think some of your friends are wide of the mark when they say that the federal reserve board and the federal reserve banks are drunk with power. It is just the reverse. We have been very sober. and very milk. and the sixth federal reserve district has been severely criticised for tagging be- hind in the procession as we have done. Nearly all the other federal reserve | banks have put the par system into ef- l feet in their respective districts, and we are standing almost solitary and alone | You must thoroughly realize this fact and why not joint with us in our efforts | to better perfect the banking system? 1 ''You cannot deny the principle that 8 bank check should be paid at par wher presented at a bank. and why shoC.d l any exchange be charged on that check l if sent through the mails? Checks are common article, and medium of com merce, and to charge exchange in these days is archaic and out of date. "Referring to the law in this matter the attorney general of the United States who is the highest authority we have has given an opinion that no bank l whether national or state, can make 2 l charge of exchange against the fedora | reserve banks. And Section IS of the 1 law to which you refer in your letter l means that 10 cents per hundred or frac- | tion thereof may be charged to banks other than federal reserve banks. IT 1 these days we are supordinating our selves to the power of the federal gov ernment in many ways, and why should we make an exception when it comes tt banking in all of it's ramifications, when reforms are instituted for the benefit ol commerce and industry of our country l "With sincere regards and best w1sscs
 I am,
 Cordially yours, M. B. WELLBORN, 1 Governor"