Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1920-05-06
BANKERS FIGHT
PAR CLEARANCE
IN WASHINGTON
(The Atlanta Journal News Bureau)
623 Riggs Building.
BY THEODORE TILLER


WASHINGTON. May 4.-More
than fifty bankers, including six
from Georgia, are here to protest
against the par clearance" ruling
Of the federal reserve board which
they claim would require country
and non-member banks to clear
checks for the reserve system with
out payment Of exchange. Most of
the bankers here are representatives
Of state institutions, but few ma
tional banks are also represented
and the Washington convention will
complete organization Of the Nation
al and State Bankers Protective as
ISOLATION. Committees representing
the association appeared before the
committees on rules and banking and
currency Monday and supported the
King resolution for an investigation
of the workings Of the reserve sys-
tenn and policies of the reserve
board. Tuesday afternoon, the en-
tire convention protested to the
board against it's ''par-clearance"
ruling.
1t was charged before the rules
committee that the federal reserve
board is increasing the cost of living
and depressing state banks. Repre-
sentative King, Illinois, said that
loans of the federal reserve system
were back Of much of the specula-
ton in commodities and that this
speculation is responsible for increas-
ing prices.
H Flood Madison, Bastrop, La,
chairman Of committee of the
bankers association, alleged the fed
eral board was using the tactics Ct
highwaymen in dealing with state
banks.
system has brought several state
banks to the verge Of destruction.
RepresentatiXe ReaHis, N on2aetad
checks on small banks, driven 10
them in high-powered automobiles
and, armed with revolvers, demanded
payment. In some instances $35,00O
in checks have been presented to one
small bank for payment at one time
and the currency demanded. Con
eress should take steps to stop this
highway robbery practice of the sys-
tenn"
The banking committee was re.
Quested to report an amendment Oh
the act. authorizing a charge for ex-
change.
Bankers from twenty-five states
were represented by committees of
the National and State Bank Pro-
lection association. Members of con-
gress also appeared as witnesses.
sci for the association. told the rules
committee that the federal reserve
board sought to force adoption OF
universal par clearances, which he
argued was an impossible dream"
Before the banking committee. E.
nj nf
tional banker. declared that the ex-
change of checks cost ten cents for
each 1000 business and he proposed
that this be authorized as legal by
amendment of the federal reserve
act.
The states represented at the hear
ings were: Alabama, Arkansas,
Kansas. Florida, Texas, Nebraska,
Kentucky. New York, Minnesota,
Idaho. Michigan, Wisconsin, Iowa,
South and North Dakota. South and
North Carolina. Virginia, New JeT-
Indiana, Georgia and Louisiana.
Georgia bankers attending the con-
ference, which will last through
Wednesday. include L, R. Adams,
ton; Alex W. Smith, general counsel;
James S. Peters, Bank of Manchest-
er; r. L. Render, Bank of LaGrange;
Ty Smith, Bank of Barlow and j. w.
Vaughan, Bank of Gainesville. The
state bankers claim that par clear
ance requires banks to perform serv-
ice for nothing and that such a rul-
ing is both unjust and illegal.
Bankers from all sections Of the
country are in attendance upon the
convention, which is discussing
banking subjects, generally, but is
mainly interested in combating the
par clearance ruling Of the reserve
board.
P. L. Long, president Of the First
National Bank Of Waverly, New
York, told the convention that some
of the national banks had acqu1esced
were scared. in" The power of the
to be a matter of policy to concur
in the ruling, but many banks now
saw their error and were ready to
join with the state bankers of the
entire country to the end that justice
might be done the country bank
Speakers at the convention claimed
that the policies and methods of the
federal reserve board had encourag-
ed several forms of business abuses,
including more Exiting" of checks,
under expansion of credit and cur
rency, with its attendant high prices,
and so on.
The meeting resolved that it was
primarily here for the purpose of de-
feating the par clearance move of
the federal reserve board, but it !
seemed probable that it's full
strength would be thrown to the
support of the King resolution which
calls for congressional investigation
of the entire workings Of the re-
serve system.
A committee composed Of Cones, of
Nebraska; Peters, of Georgia, and
Smith, of Georgia, was named to ar