Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1920-01-13

Governor M, B, WeIIborn, in
Reply to Country Associa-
ton, Says Public Interest
Demands This Practice


banks is mandatory under the fed
eral reserve act, and quoting figures
to show that almost a third of the
-par-clearing banks in the United
States are located in the Sixth fed
eral reserve district, M. B. Well
born, governor Of the Sixth Federal
Reserve bank in Atlanta, on Mon
day issued a statement relative to
the opposition shown by the Geor-
gia Country Bankers association to
the par clearance order recently is
sued by the federal reserve officials.
According to Mr.. Wellborn, there
are S0,260 banks in the United
States. OF these 26,315 are on the
par list; that is, they clear all
checks at par without making ex-
change charges. There are 3,945
banks in the United States not on
the par list and Of this number 1853
are located in the Sixth federal re-
serve district In the other eleven
federal reserve districts there are
2,777 banks not on the par list. This
shows, according to Mr.. wellborn's
figures, that 29.6 per cent of the
non-par- clearance banks of the coun-
try are in the Sixth federal reserve
district. His statement on the sub
ject follows:
RGr WeIIborn's Statement
'The question of par-clearing Of
checks through the federal reserve
banks is one of the mandatory pro-
visions of the federal reserve act,
as enacted by the congress of the
United States by an almost unanf-
nous vote. Since the beginning of
operations Of the federal reserve sys-
tenn 1t has been the endeavor to inn
press upon the non-member state
banks the wisdom and necessity OF
a central agency in each district
through which checks could be coll
lected at par, and at present 26,315,
banks, out of total of 30,260 ma
tional and state banks in the United
States, have joined the collection
system instituted by the federal re-
serve. These banks do approximately
IS per cent Of the commercial bust
ness and do not charge for paying
checks. In the district known as taa
Federal Reserve Bank of Atlanta
district, all national banks and 490
state bank at present remit Iat par
for checks sent them by the FederA1
Reserve Bank of Atlanta or it's
branches, leaving in the district
1,168 state banks that do not remit
~%4A
member banks in the entire United
States not on the par list.
Public Interest Demands It
tUnder the law federal reserve
banks are not permitted to pay ex-
change charges for the collection of
bank checks and drafts payable upon
presentation-and in compliance
with the law federal reserve banks
must receive on deposit, at par,
checks and drafts, payable upon
presentation, drawn on any bank in
the United States, whether a mem
Der of the federal reserve system or
not. So that state banks not mem
bers Of the federal reserve system
have no tenable grounds for refus-
ing to pay checks on them by their
customers, at par, when sent them
by the federal reserve bank. All
national banks and the state banks
that have Joined the federal reserve
system remit at par for all checks
drawn on them and any loss of profit
for performing this service for their
customers has not caused the banks
to pass dividends. The public,
speaking through congress, has de-
cided that checks must be collected
at par, the business interests de-
mand it and the customers of banks
have right that their checks shall
be paid at par whether presented at
the bank window or through the
mail. The banks depositors are en-
titled to the service for the reason
that they keep their funds in the
bank, which item is the main earn
ing power of bank.
"In a recent statement by the
Country Bankers Association of
Georgia it was claimed that If the
law of congress prevails and the
state banks not members of the fed
era1 reserve system have to remit
at par it will entail loss of million
dollars to the country bankers of the
state. If this is true, the general
business and agricultural interests
Of the state will be the gamer, and
the earlier the law is complied with
the better. For bank to charge eX-
change for paying its own custom
ers' checks sent them through the
mail is a burden and an unnecessary
toll on commerce.
Oppose Changes
1.-THE Farmers Educational and
Cooperative Union of America; the
National Grange Of the United
States, representing more than a
million farmers; the national asso-
Citations of hardware merchants, gro
Gerry merchants, retail dry goods
merchants, credit men, and various
other organized bodies of the COM
mercia1, agricultural and industrial
interests of the nation are on record
before congress as opposed to any
change in the federal reserve act
with reference to exchange charges
on bank checks"
I'm order that banks may not in
cur any expense in RENTING for
checks drawn upon them by their
customers and payable upon pres
entation, the Federal Reserve bank
Of Atlanta, in sending them such
items, will:
81. Enclose in each letter a stamp
ed envelope for return remittance.
"2. Permit the bank to send US cur
rency, at our expense, in payment of
letter enclosing items to them.
"3. Or permit banks to open with
us a non-member clearing account
and send to us for credit, at par,
items drawn on any of the $4,000
and more banks in the United States,
shown on our par list.
"4. Or will accept in payment
therfor, usual bank draft.
1.-THE federal reserve system, while
UieNad mi ma 1,ilv financial hull