Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-04-17
LOCAL BANKS WILL
R Be GIVEN RIGHTS

Federal Reserve Board to
Arrange Settlements
and Loans.
BY I. A. FLEMING.
The federal reserve board has in
terested itself in the problems of the
bankers of the District of Columbia.
in far as they concern the difficulty
In making quick loans through the
federal reserve bank at Richmond and
In their desire to adopt new plan
for the conduct of the daily clearings
OF checks, or more properly the set
tiement of balances as result of the
daily clearings.
These matters have recently been
considered by the Washington clear
Ing house, and sentiment was unani-
mously in favor of appealing to the
federal reserve board for the removal
OF the local member banks from their
membership in the Richmond bank to
aff1liation with the Baltimore branch
of the same bank
II IeQulFeS Two days 10 COuuuCL iHe
negotiations incident to borrowing
money from the former institution.
one of the chief functions of the sys-
tenn being to advance on collateral to
its members. and two hours to get the
cash from Baltimore. thus compelling
banks to carry more cash to in their
tills or vaults than they would IL
loans were easier made.
In the matter of settlement of bal
ances. clearing house member banks
desired to settle credits or debts di-
rect through the reserve bank in
which they held membership using
their general reserve funds which
they carry with the parent bank Of
the system, at present the Richmond
Institution.
They desired to have the reserve
board designate an agent here too. to
whom their daily credits or debts
shall be reported by the manager of
the clearing house. and the agent
then have authority to wire the Rich
mond bank to make the necessary
transfers of credit to creditor banks
in the clearing house and charge the
accounts of those that are debit-ths
TO be done at once by wire.
Given All They Asked.
A committee of the Clearing House
Association waited on Gov. Harding
yesterday and put forth their wishes
dS 10 the CndHReS desired, lncluQlnR
the transfer of membership to the
Baltimore branch of the Richmond
bank.
After they had finished the governor
assured them that he saw no reason
why the banks of the city of Wash
ington should be treated like country
banks" whereupon he declared that
he was with them and that he knew
the board would grant their requests
IL it were possible, but the crowded
condition of the Baltimore branch
bank and the further desire of the
Richmond parent to hold on to the
capital business might prevent delay
in making any change.
However, he assured them that a
plan was now being worked out that
would, in the near future, permit the
settlement of debts and credits in
daily clearing operations with the
Richmond bank direct from the Treas
ury Department, the transfer and
credit of funds to the member banks
being carried out direct by wire at
the expense of the reserve system.
He even went further, and gave as
surance that in the future. after a
short delay, 1T would be possible for
the local institutions to get whatever
cash they might require during bust
ness hours at the Treasury. their re-
serve accounts being debited by wire
direct.
AS now conducted the settlement of
daily balances is sometimes serious
task for cashiers. Immediately on be-
ing informed of their debit comes a
rush to the phone to arrange settle
ment, usually by New York exchange,
but frequently the creditor has all
the funds needed in New York and
doesn't care to increase balances else
where and then 1t Is a case of settling
in cash. which compels the carrying
ley RI o1rl
larger than banks generally care to
keep idle. Sometimes it is hard to get
the cash needed, and in any event 1t
keeps cashiers and assistants busy
until the debts are settled.
AS soon as the new plan is in work.
ing order bank officials will be re-
lieved of all this work-the clearing
house manager will send his attested
list Of credits and debts each day to
the Treasury agent and the matter
will be ended.
Banks can increase their reserves
at Richmond by wire to New York
or Baltimore regional banks where
they always carry la rye balances.
The Improvement will be the result
of suggestion made at the local bank
ers' convention in June. 1919.
Meet at 10 O'Clock.
On Monday morning the clearing
house VIII meet AZ IL y ClOCh HS
three banks that were not present
at the last meeting have acquiesced in
the action of the majority.
This action was necessitated by the
earlier opening of the New York mar
ket, which gave our bankers small
opportunity to call or place loans,
afte rthey had received their credit or
debit account from the local clearing
house.
Business on today's session OF the
local stock exchange was lively with
some evidence Of selling by investors
Influenced by adverse criticism OF
street railway matters.
Railway preferred sold at 81 to 81;
Capital Traction at SSA to 50.
Washington Gas was a little f1rmer
at 45ss
Sales of Continental Trust stock
were made at 10 and Washington
Loan and Trust at 255.
The typesetters were strong. Ian
ston "A higher at s21a and Mercy at
1876.
Bonds were more or less neglected.
Bankers Meeting.
The District Bankers Association
will meet Monday night at the chap
ter rooms.
The pound sterling closed of to 3.75:
francs. .061s: marks. .017. and lire,
.o499.