Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-10-21
BANKERS OPEN FIRE
ON METHODS USED
BY RESERVE BOARD
Governor Harding Styled
"Usurper Of Authority"
by State Banks.
4,000,o00,ooo NEEDED
NEXT YEAR, SAYS HOUSTON
Secretary of Treasury Appeals
for Strictest Economy All
Over Nation.
LBw Associntedprnssl

WASHINGTON, Oct. 2O.-while a
survey OF the financial policies OF the
government by Secretary Houston
drew the attention OF delegates to-
day at the general session OF the
American Bankers Association con-
vcntion. State bankers. in their sec
tion meeting which followed, brough.
administration of the Federal re-
serve system under fire. They adopted
resolutions "condemning and depre-
eating methods employed by the
board in its relations with state
banks which are not mem bers OF .he
reserve system, although the boarl
did not lack defenders during the
discussion.
Indignation against the boards
regulation compelling the collection
OF checks and remittance of the face
amount at par was freely expressed.
Governor Harding was styled a
"usurpcr" of authority and COM
mittce vas named to seek amend
ment OF the reserve act so as to
guarantee to all bankers the right,
and privileges" OF fixing charge
on tho handling OF checks drawn or
all excepting local banks.
Charge "Force nnd Coercion"
Speakers declared Governor Hard
ing had employed force and coer-
cion" by enforcing the use Of the
par clearance system under which
many State banks were said TO hav.
been compelled TO enter the reserve
system or lose certain class or
business. This was mot only un-
fair. but without basis in law" i.
was asserted.
Charles De II. Claiborne, OF New
Orleans. declared tho service rem
dered by the banks in the transfer
OF checks was legitimate. and that
tho banks wore entitled to compen-
sation. lilo asserted that tho ar
rangement ordeMd by the reserve
board for par clearance does not
make every check worth one hundred
cents on the dollar because thero Is
nearly always an exchange charge.
so the merchant who supports par
clearance doesn't gain anything" II
the merchants have benefited by tho
system, AIR. Claiborne contended, tho
public has not been able to see ii
reflected in reduced prices
The reserve boards staunchcst de-
fender was .. Howard Wolfe. of
Philadelphia. who asserted that abo-
lition of the clearance and remittance
charges and establishment Of the
country-widc gold settlement saved
bankers and commercial interests
$135.o00.0oO last year. This amount,
he said. would have been eXacted as
tax on business had not the board
organized a system 10 clear all ex-
change Of bank drafts.
Lnuds Federal Reserve system.
Although he joined in the protest
against the par clearance regulations.
l.. c. McDougal. OF Buffalo. who was
elected president OF the State banks
section OF the association. expressed
unqualified approval of the principles
of the reserve system. He declared
it had come to stay and urged the
State bankers to work together for
It's growth instead OF complaining
about ii all of the time
MANY country banks are much in
censed." he continued. against tho
Federal reserve banks because OF
their policy of forcing par collection
from banks which are not members OF
the system. Personal feelings OF the
officers of these non-member banks
is also u factor IN keeping them out