Evening star., 1920-06-27
BY L. A. FLEMING.
morrow. Moeda6 mSrning Nfe

Tomorrow, Mosda6 msrning ehe
banks of washington will reap the
first fruits of cooperation in the
adoption of the recomme ndations ad-
yanced at the first annual convention
of the District of Columbia Bankers
Association held at Deer Park a year
ago. The great betterment IN pahk :
ing conditions. daily Improvement
for every business day in the year
will come through the action OF the
Washington Clearing House Associa-
tion. where all uniform action. save
on subjects where each OF the oankS
is in accord. must come
on and after tomorrow there VIII
be an ending of the daily hustling OF
bank cashiers and assistant CASHIERS
for cash or exchange on New York,
Baltimore or some other city, as a
means of settling clearing house bal-
ances: there will be an end 10 the
practice of having the federal reserve
bank of Richmond ship currency by
express with the incidental delay, and
there will be an end of the daily
trirs of messengers to other banks
with dishonored checks for redemp-
ton.
These are important matters, h a.
McKee, head of the National Capital
Bank characterizes the changes that
will supplant these old-ume 1unctlons
as the most important that have
been made since the clearing house
was established
How 1t VIII Be Done.
'SThe manager of the clearing
house, under the control of the clear
ing house committee. shall supervise
the exchange of checks and the COM
putation of balances arising there
from He shall transmit to the fed
eral reserve bank of Richmond.
through its agent in the, city OF
of debit and credit balances result
ing from the exchanges. He shall
have control and direction of any
clerks appointed to assist him and
of the messengers of the several
members and associate members of
the association, etc
THE federal reserve bank of Rich
mond shall after June % become the
agent of this association and OF the
respective members thereof for the
purpose of effecting the settlements
of daily debit and credit balances.
Each member of the association
shall, by proper and uniform resolu-
tion of its board of directors. author
iZe said bank to act for it as its agent
for said purpose. Each member shall
authorize the clearing house commit
tee of this association to enter into
an agreement with said federal re-
serve bank for said purpose
Wires Daily to Richmond.
by IL o'clock am. the manager
of the clearing house shall transmit
to the federal reserve bank of Rich
mond. through its agent in this city,
a statement of the debit and credit
balances of the days clearings, and
the debit balances shall be charged
TO the respective accounts of the
debtor banks, not later than O'Clock
of the same day. And Immediately
on payment of such debtor balances
the reserve bank shall credit the
creditor banks with the credit ball
ances due them ...
Provision is made for the contin-
gency of a debtor bank exceeding it's
available balance. Said bank shall
before 1880 pm. of the same day
deposit sufficient funds to make it
square as to the clearing house debit,
while the federal reserve bank, will
for failure to meet the obligation Ia
provided This is contingency that
will rarely, if ever, occur. while the
existence of such a condition, other
than long enough for action to REM
edy it, would mean failure. r-;-%sf
Redemption Of Bad Checks.
Checks that for one reason or an
other are refused by the bank on
which drawn. no funds, no signature,
not indorsed or other reason will be
exchanged at a special clearing at
2 o'clock pm, earlier on Saturday.
These checks will be cleared and ball
ances will be settled by payment to
the credit institution of due bills,
which will be cleared the next day
at regular clearings- Banks have the
right if they desire to present these
refused checks for payment at the
bank responsible therefor. by mes
senger, if desired. before 2 o'clock
The federal reserve bank of Rich
mond cannot function on legal holi-
days in Virginia, even though the
District may not observe the same
holiday.
AS to this contingency it is pro-
vided.
'The manager shall draw his draft
upon each member bank that is
debtor to the clearing house and de-
posit said draft to the credit of the
clearing house in some bank to be
designated, and he shall at the same
time issue his checks against the
credit thus established to the credi-
tor banks. and the drafts thus drawn
and the checks thus issued shall be
cleared the next business day"
Other Banks MIKE Good.
In the event of default in pay
ment of it's debit balance to the re-
serve bank of Richmond and the re-
fusal of the defaulting member TO
return all checks and other items
unmutilated to the banks from which
they were received, thus putting the
obligation up to the depositors of
the items. then the several members
exchanging with the defaulting bank
will make good the balances with
the. Richmond institution, in proper
tion to their respective balances.
All checks must be treated in this
manner-settled in the clearing house
on Richmond balancesE.but a member
or associate member bank may pre-
sent an item over the counter for
payment, only with the permi ssion of
the member or associate member
drawn upon. This clause will pre-
vent the presentation of a large cur
rency item over the counter at a
time when it might embarrass the
paying bank
Non-member banks have been
changed to associate banks. which
really gives them a little closer as
sociation with the parent organiZa- :
tion.
But There Is More to 1t.
But there has been more than
this accomplished Heretofore time
and frequently delay attended the
forwarding Of currency from Rich
the new cooperative method the
member bank may wire Richmond
for currency desired. Richmond will
Immediately authorize the payment
of the required sum at the Treasury
in aShington-almost simultaneous
ly-a few minutes between, at the
longest.
The Federal Reserve Board and
The Secretary of the Treasury saw
the needs of Washington and ap-
proved the action taken to better the
,Sit