Evening star., 1921-05-18
HANDICAPPED IN
CERTIFICATE BUYING
Non-Members Find Difficulty
in Securing AIIotment-Par-
Collection Ruling.
BY 1. 4. FLEMING.

By 1. 4. FLEMING.
Some local bankers whose inStitu
tions are not members of the Fedora
Reserve system are complaining tina
they do not have fair chance Will
the member banks in the bidding TO
Treasury certificates
OF late. the publicity given the vari
Gus issues of certificates and the rate:
of interest have caused a decided i'm
provement in the demand therefor
from conservative investors who hav,
become educated to their inveStmen
value.
Trust companies and savings bank!
as well as national banks are fire
Quentiy asked to fill orders for Gus
toners. but in the case of the last is
sue. that of May 16. only orders PLACED
through national banks seem to have
been given consideration and but
comparatively small part of their sub
scribers will receive allottments-
Announcement of intent to maxi
the issue was first made public OF
the morning of the Eth instant. but tht
regular circular announcing the terms o
the loan. etc. was not issued unit
the morning of the 18th.
AS stated before, in this column
the entire amount of certificates. ant
more. was subscribed for by wire or
ders. largely from national banks OF
the morning of the 18th instant Ir
some cases the Richmond bank wa:
authorized to charge the amount O
subscription to the buying banks re.
serve account. while in others the
buyers took advantage of the provi.
sions of the sale. which allows then
to retain funds on deposit Hntil such
time the Secretary of the Treas
ury asks for payment.
Some of the fortunate subscribers
did not trust to the telegraph, but
used the telephone direct in placing
orders.
There is probably no way of rem
cept as to future sales and for all
to use the latest facilities in plac-
ing orders.
However. there is practical assur-
ance that the 5la per cent rate will
be cut on the next issue of certifi
on proceeds of certificate sales re-
manning on deposit TO the credit OF
the Treasury.
Non-membcr banks would be COM
PEELED to make Immediate payment
for certificates. they are not desig-
mated repositories.
Explains Collection Decision.
Diverse explanations have been of.
Tered regarding the decision of the
Supreme Court in the par-collectior
matter
1t is denied officially that the ruling
Is Il bloN dt par CoiiectlOnS, or tnd1
1t is either for or against the reserve
system.
The Federal Reserve Board explains
that the case is merely sent back fol
trial.
The New York Federal Reserve Bank
issued the following:
supreme Court has rendered a de
ciSion in the case of the Georgia coun.
try banks against the Federal Re.
serve Bank of Atlanta, UNFOLDING the
fl -,
the district court of the United States
has jurisdiction of the case, but de
nies the federal reserve bank motion
to dismiss the plaintiffs complaint
Suit was brought by a group of non.
member country banks to enjoin the
federal reserve bank from collecting
checks drawn on the country banks
plaintiffs alleging that the fedora
reserve bank intended to undertake
the collection of such checks by pres.
entation and demand of payment. in
cash for the purpose of injuring the
bank on which the checks were
drawn.
LAS the issue before the Supreme
Court was merely whether. as mat
ter of pleading. the plaintiffs bill of
complaint stated cause of action.
the decision of the Supreme Court
was not the final determination of
rbe litigation. and the case will now
be sent back TO the District Court for
u d.
appeal upon the merits. The opinion
of the Supreme Court has not denied
the legal authority of the federal
reserve bank to collect checks on nom
member banks by making presenta-
ton thereof at the counter. but holds
merely that non-member banks NAV
be entitled TO relief il they can prove
that the federal reserve bank delib-
erate}y intends to accumulate check =
and present them in an oppressive
manner for the sole purpose of in
juring the bank upon which the
checks are drawn.
'As to the scope of the Supreme
Courts decision. the court said: The
question at this stage is not what
the plaintiff may be able to prove
pretation of the defendants acts. bu,
whether the plaintiffs have shown
grounds for relief il they can prove
what they allege.'
The Supreme Court decision will
not interfere with the present check
serve banks. and those banks will
= continue. as heretofore. to collec,
rhecks drawn upon those banks which
are listed upon the par list
Dividends Declared.
Directors of the American Telephone
and Telegraph Company have declared
quarterly dividend of ~ per cent
"a! dDIe Jul! ID DOCKS closing mere
June II and in New York June 20.
Regular 21a per cent quarterly has
been declared on Mergenthaler shares
payable June 80 to shareholders OF
record June T.
Hallway preferred shares were al
their high on the current movement
today when they sold at So share
only a few odd shares of Capita
Traction sold. these at S.&. and S7%
Mergenthaler showcda little strength
in advancing to 120l.
The only business in bonds was one
sale OF $500 Railway debenture s.
at SO.