Evening star., 1920-02-27
PROTECT|VEPLAN
SENT TOD.C. BANKS
Federal Reserve Act Criti-
cised by Newly Formed
National Association.


Copies of the resolutions adopted by
nm assembly of national and state
bankers held at New Orleans Febru
ary s. in the formation of the Ma
fionaf State Bank Protective AssO-
citation. together with blank forms
for approval of their respective
boards. were received by all banks
and trust companies in Washington
today VINO are not members of the
federal reserve system.
. While il is Specifically pointed out
in the resolution sent out that the
new organization is in favor of and
heartily approves the purposes of the
federal reserve act. and that, all in
ferences and allegations to the con-
trary, IL is in no opposition to the
federal reserve system. il does de-
plore and disapprove most emphati
calIy of what is charged to be seriou ,
abuses of the enormous powers grant
cd in the federal reserve act and in
the administration thereof.
Charges of coercive and oppressive
methods against non-member state
banks. and the announced policy of
the federal reserve bank to enforce
universal par clearance of checks by
methods described 10y federal re-
serve bank itself. it Is claimed. -
embarrassing. annoying ana eNpen-
sive to the non-member banks is cited
as an example of such me- thods and
is denounced as both Illegal and
wrong.
II is the opinion OF the newly
formed association that the proper
adm istration and necessary amend
ment of the federal reserve art are
questions for non-psrtisan states
manship and that whatever political
n hey IN Will
he forced upon the banks by acts OF
the Federal Reserve Board.
That in order that light may be
thrown upon this important law and
its administrations, s." that defect
may be ascertained and correcte" and
its INEQUALITIES and abuses eliminated.
the National State Bank Protective
Association urges upon all representa-
tives and senators, without regard 10
party. to institute an official investi-
cation OF the administration of the
federal reserve act since its passage.
in general and With regard specihcal-
ly to a long list of details in part1cu-
lar. which are set forth in the state
ment sent out
Pststs Asked to BE PrObed.
The most important of these details
that are urged TO be investigated IN
clude:
Coercive methods. il any there be.
to force n-mem6er state banks to
become members
The question Of substantial connect,
tfon by federal reserve banks with
their own member banks.
Open market transactions.
The enormous and unexpected earn
ings Of the federal reserve banks,
amount ing during the year 1918 to
about Sss.000.06e on paid-in capital
cent for surplus alone.
The relative salaries and bonuses
paid by the federal reserve banks to
their officers and employees as COM
pared with positions of similar re-
quirements in privately owned institu-
'Rns; Rnass,r. no,,ctss toward n,ornh.r
banks. under the guise of corrective
measures. to a degree where many
such members are afraid to take any
position which might be construed by
federal reserve officials as being in
opposition to their policies in dread
d punitive measures.and reprjSals.
ATTEMPTED destruction of the inde-
PAndence of the great state bank sys-
tsssns such.
Jntimidations iif any there he. of di-
rts:tors of the federal reserve banks to
s4ch extent an to prevent many Of them
uton them by law. and the practices
e5ployed in selecting the directors.
Efforts. IL any, to force the diversified
btsiness of the country. which varies
ls4ge3y in character and custom from
section to section. to conform to rigid
rJ1ea and standards determined upon
a announced by the Federal Reserve
BNhrd-often contrary to the established
c3toms and channels Of trade.
As to Currency> InAatisn.
The extent to which imitation Of cur
rcTcy hy the Federal Reserve Board, is
responsible for the high cost of iiyins.>as
cfnrSod by Or. Harvey Wiley and other
h 10
The refusal. il any. Of federal reserve
t3nks to rediscount for member banks
p5per which complied with the law in
TIE most minute particulars. but did not
OF the Federal Reserve Board.
The refusal. il any. OF federal reserve
banks to make loans to member banks
secured by the liberty bonds. when re-
Quested to do SO.
The unwisdom and Conspicuous nref :
legacy OF the announced policy OF the
federal reserve system and banks to
spend any amount of money to collect
checks on nonmember banks, greatly
in excess Of a normal exchange charge
rather than to pay the banks for such
service. and by what right the federal
reserve banks now propose to use the
surplus which at least in mart belGpss
TO the government and consequently TO
the people thereof. for the coercion and
oppression Of r9-t"in oitiZrre thereof
Ard the method of handling clear
ance deposit accounts and the "hoat"
connected herewith
All hanks in the United States ar.
heinE furnished with a copy of the
resolutions and requested 10 exprs.s
their opinion thereof
Appeals have been also sent to the
American Bankers Association and
all state bankers associations to ron
der all possible aid in the movement
for an investigation.
Riggs TO Have Savings section.
AT a meeting last night of the Of
fcials Of the Riggs National Bank il
was announced that a savings depart
rnent would be opened in connection
with the bank on March L. The de-
rartment will be located in the annex.
which has been used for several years
past to accommodate the liberty loan
department of the bank
Three per cent interest will be pa i'd
on savings accounts. hich is the pre-
valing rate of interest on simila
banks. The hank will be open to ac-
comnodate savings depositors be-
tween the hours of $50 and 4. The
banking department will continue its
present hours which are from 8 to ;
Phillip NJ. G1rnett, now receiving
teller. will be in charge OF the new
savings department.
Convention Com mittee to Meet.
There will be a meeting this after
noon of the convention committee OF
ttre District of Columbia Ba Hkers' As
sociation at the offices of Robert N
Harper. in the District National Bank
Mr. Harper is chairman OF the com :
mittes. He said today that nians were
fast getting under way, and that
everything looked most encouraging
for an exceptionally successful con
vention. N. II. Rosenberg. president