The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-21
RESERVE BOARD HIT
BY STATE BANKERS
Par Clearance of Checks Said
to Be Unjust and Work Hard
ships on Many.
DEFENDERS TO RESCUE
Houston at Washington Meet
ing Predicts Four Billion
U. s. Expenses.


ysy of the financial policies of the Gov.
eminent by Secretary Houston drew the
attention of delegates to-day at the
general session of the American Bankers
Association convention, State bankers
in their section meeting which followed
brought administration of the Federal
Reserve system under fire. They adopted
resolutions "condemning and deprecat.
ing methods employed by the board In
fits relations with State banks which
nre not members OF the Reserve sys-
tenn. although the board did not lack
defenders during the discussion.
Indignation against the boards regu-
lation compelling the collection of checks
and remittance of the face amount a.
par was freely expressed. Gov. HARDING
was styled a ''usurper" Of authority. and
a committee was named to seek amend
ment OF the Reserve act SO as to guar
antee to all bankers the rights and privi
leges" Of fixing 4 charge on the handling
of checks drawn on all except loca
banks
Speakers declared Gov Harding hat
employed force and coercion" by en-
forcing the use of the par clearance
system. under which many State banks
were said to have been compelled te
enter the Reserve system or lose certain
classes OF business. This was mot only
unfair. but without basis in law" it was
asserted.
says Banks Earn Check Bonus.
Charles De B. Claiborne of New
Orleans declared the service rendered
by the banks in the transfer Of checks
was legitimate and that the banks were
entitled to compensation. He asserted
that the arrangement ordered by the
Reserve Board for par clearance docs
not make every check worth 100 cents
on the dollar because there is nearly
always an exchange charge. so that the
merchant who supports par clearance
does not gain anything" If the mer-
chants have benefited by the system,
Mr.. Claiborne commended, "the public has
not been able to see II reflected In re-
duced prices"
The Reserve Boards staunchest de-
fender was C.. Howard Wolfe OF Phila-
delphia, who asserted that abolition of
the clearance and remittance charges
and establishment OF the countrywide
gold settlement saved bankers and COM
mercial interests s135.000.000 last year.
This amount, he said. would have been
exacted as a tax on business had not
the board organized system to clear
Although he Joined in the protest
against the par clearance regulations
Il. C. McDougal of Buffalo. who was
elected president Of the State banks sec
ton of the association. expressed un-
qualified approval Of the principles OF
the reserve system. He declared 1t had
"come to stay" and urged the State
bankers to work together for it's growth
instead OF Complaining about It all Of
the time
MANY country banks are much In
censed." he continued. against the Fed
eral Reserve banks because of their
policy OF forcing par collections from
banks which are not members of the
system. Personal feelings of the officers
OF these non-menber banks are also fac
tor In keeping them out of the reserve
system. The question of collection on
charges Is one thing, the question OF
proper mobilization OF reserves is an
ether and entirely different thing. How
eyer resentful country bankers may be
on the question of collection charges,
they, In common with all banks of the
country. contribute their fair share
toward the expense Of maintaining oar
gold reserves"
Would Down Bolshe vism.
Annihilation of Bolshevlsm in every
country, the fixation of the German In
IDENTITIES to the Allies and the recon-
struction of devastated districts are the
great needs of the hour for the COM
plete restoration OF Europe. Fred l.
Kent. vice-president OF the Bankers
Trust Company of New York. declared
In an address Mr.. Kent was director
Of foreign exchange for the Federal
Reserve Board during the war and has
Just returned from Europe. where he
assisted the PREPARATION Commission as
financial adviser.
with Bolshevism destroyed" Mr..
Kent said. production will increase.
currency expansion will decrease, gov
ernmental budgets can be made to
balance and ultimately taxation can
be reduced.
with the German indemnity fixed
that nation can get down to work
without fear that successful operation
may increase her liability, and her
burden will begin to grow less. At
the same time the payments that she
must make will serve to better the
conditions In the countries of the Eu-
ropean Allies. Such help as Germany
may fairly ask from the rest Of the
world can then be extended without
fear.
Work for More People.
with the reconstruction of the dew
astated districts productive work can be
given to many men who are drawing
funds from governments for unnecessary
purposes. The production from the re-
constructed mills will also help to re-
lieve the pressure of want to q large de-
gree.
with these three problems solved all
the wars now going on in Europe and
the tremendous tax that Ia being put
upon the people for military purposes.
including the loss of the use of the time
Of men, would pass.
The great part of the United states
at the moment lies In using every force
possible TO uphold the American work.
man who has successfully withstood the |
faiiecious argument of the false agitator |
and help them educate the foreign work. |
crs in our midst who have not been so !
fortunate. We must also further trade |
with all OF the nations of the world In |
every safe and judicious manner that |
opens up TO U.S."
Houston Issues Thrift warning.
Government expenditures of four |
billion dollars during the next fiscal |
year were forecast by Secretary Hous-
ton. Tho Secretary outlined the Treas
ifry'e prbgramrne for handling the war