Evening star., 1921-02-23
WANT INTEREST ON
REQUIRED RESERVE
Virginia Banks Start Move
ment-BaItimore Refuses
Checks of Par Fighters.
BY 1. A. FLEMING.

S's SS~sSbssSS ~ shSiNoSS
| Checks of Par Fighters.
| BY 1. A. FLEMING.
| What may be called the first or
ganized movement to obtain interest
on reserves carried with the federal
reserve system was initiated at Lees
burg, Va. yesterday. when group 3 of
the Virginia Bankers Association.
composed of northern Virginia bank
ers, passed a resolution calling for an
anne endment to the federal reserve act
authorizing the payment on reserves
OF member banks of not more than 3
per cent interest annually.
| Ihe great profits of the federal re-
serve regional banks, made largely on
money belonging to member banks,
Tor which the latter receive no in
terest has unquestionably called at
tention to this matter.
| Ine law provides that banks in CEN
tral reserve cities like New York. Chi
cago and st. Louis must keep 13 per
cent of their demand deposits and 3
per cent of their time deposits with
the federal reserve bank of which they
| are members
| Reserve city banks must keep 10
| per cent of their demand and 3 per
| cent OF time deposits with the banks
OF which they are members. Wash
| lnston is in this class and has some
| thing over $1O.000.00O on deposit in
hlchmond. continually keeping this
reserve good by telegraphic credits.
| Country banks must keep per
| cent of demand and 8 per cent of
| time with their reserve bank.
| These millions of dollars have been
at the disposal of the federal reserve
banks for over six years without the
payment of one cent of interest, the
trainers of the reserve measure prob
ably considering that the privileges
of rediscounting might warrant the
| action
| Time and again the banking fra
| ternity, which previously received .
| per cent interest on its reserves when
! carried in reserve and central reserve
| their requests for interest, but no action
| has been taken
| The northern Virginia banks have
taken the step. The maximum limit,
not more than per cent, permits of
any action Congress may deem wise.
! Some of the bankers were of the opinion
| that the rate should have been explicitly
| fixed at per cent. and it is proba BILE
/ that other state associations, if they
| take the matter seriously, will so fix
| the rate
There is small chance of Congress TAX
| ing up the matter unless the movement
started at Leesburg spreads into a ma
on-Wlde demand for interest, and there
is good reason to expect just such ac-
tion.
North Carolina Checks.
Baltimore bankers have taken the bull
cept checks drawn on non-member banks
in North Carolina now engaged in
fighting the par collection system of the
Federal Reserve Banks
Baltimore bankers are the first to thus
come to the aid of the Federal Reserve
Board. having officially announced that
they will neither receive the checks in
the ordinary course of business as de-
,, posits, nor will they accept them for
collection.
Depositors in the banks of North
Carolina that are engaged in making
the fight for their right to charge
exchange or pay checks in exchange
on other cities will not relish the
idea of having their checks turned
down by Baltimore bankers, in the
chief city of the southeast. Where
possible it may lead to the transfer
Of deposit accounts to member banks.
The par-collection system has been
extended to every state in the Union.
About sixty-nine banks in North
Carolina enjoined the Richmond Fed
| checks upon which cash for checks
at face value was refused over the
counter, the bank demanding col
lection fee. The Richmond bank will
tion in the near future, and. If sue
cessful. will protest items upon
which payment is refused.
Washington May Act.
1t is a matter of news that the Wash
| ington Clearing House Association may
take hand in the North Carolina case
Local bankers declared this morning
that they would call upon Cuno H. Ru-
dolph. president of the clearing house,
and ask that meeting of the associa-
tion be held for the purpose of consider
ing this phase of the collection fight.
Local Securities.
Local securities moved with consider
able freedom on today's session of the
local stock exchange. The feature of
strength displayed in the shares of the
Washington Railway and Electric Com
pany. The common stock did not sell.
but the bid price was 26. several points
above the last sal9 The preferred sold
at a new high on this movement, 60, and
| the closing bid was so, with 81 the ask
| ing price at the close.
Washington Gas 7k per cent notes
sold to the extent of $4,000 at 1909.
slightly lower. Capital Traction SIS
brought 81 and later 86A
! A small sale of Washington Gas was
made at Al, a new high on this move
! ment. Traction shares steady at IS.
| National Bank of Washington stock
brought $3.50 share and Continental
Trust Company $105.
Directors Invited.
p n. Harper. president of the Dis
/ trict of Columbia Bankers Association
has extended invitations to all local
i bank directors to attend the meeting of
the association next Monday night for
the purpose of hearing Representative
| Lewis T. McFadden on the functions
| and methods of operation of the pro-
ton.
! Personal Mention. :
J Messrs. Jacobsen and Waller, cash
| lers. respectively, of the National Met
ropolitan and American National
/ banks, were guests at the New York
| chapter dinner last Saturday night
! Incidentally, they were caught in the
| storm. but were not delayed, as the
! dinner was at the Pennsylvania
Hotel.
/ Draws Down About $2S,OOO,OOO.
| Secretary of the Treasury Houston
has called upon banks holding funds
/ to the credit of certificates of the
January Is date to pay into their re-
| spective federal reserve banks so per
! cent Of the balance on hand by Thurs
| day.
| This will mean the withdrawal from
national banks Of about $4,000, 900.
|FUR OFFERINGS DEcI INF