The Owosso times., 1921-07-01
WASHINGTON LETTER
BUREAUCRATIC PERSECUTION

washington, June 27.-"Officia
persecution and oppression in tn
united States which would bav,
done credit to the absolutism of Pc
sia in its palmiest days has been nm
covered by a recent decision of tb,
supreme Court. The Federal Re
otates, II not in the world-has beer
serve Board-the most powerful Fl.
nancial organization in the IJnited
accused by the Supreme Court ot
making warfare upon Legitimate
creations of the States"
Although there has been a hint
OF the facts in the past a full state,
ment OF the manner in which the
rederal Reserve Board abused its
powers has not heretofore come TO
public attention. 1t appears that the
Board undertook to use its Official
authority in an illegal way to force
State Banks to become members of
the Reserve System against their
wishes. Various schemes were re-
sorted to but in spite of these mea-
sures many of the banks undertook
TO preserve their independence and
their right to conduct their business
IN accordance with the laws of the
State rather than of the nation.
This right the Federal law guaran-
teed them.
AS last resort, in its efforts to
punish State Banks that refused to
become members the Federal Re- !
serve Bank would have one of it's
agents gradually accumulate checks
on the State Bank until the amount
OF such checks exceeded the amount I
OF currency said State Bank was
required to carry in it's vaults. II
would then send its men hurriedly
and unexpectedly to demand paw
ment of the checks in cash, in default
OF which the checks were sent TO
protest and the news spread about
the community that the bank was
being questioned by the Government:
nat 1T had dishonored checks, and
me result would be, very likely. a
'un on the bank and it's destruction.
The bank could save itself from this
iisaster by signing an agreement to ,
ubmit itself to the orders of the
FEDERAL Reserve, System. =
10 protect itself from the danger 8
I proceedings of this kind the Amer
,an Bank and Trust Company of S
'e9Igsaas sasppealed to the, Courts tol
revene the Federal Reserve Rank
I Atlanta from continuing coer- S
I'VE methods such as Indicated
oove. In its defense the Federal
eserve Bank asserted that the hold
OF checks has right to retain
em at his, pleasure. A
The Supreme Court held that a,
hlle this was true so long as the h,
olive is an honest one, the right a,
n not be exercised for a dishon- A.
able purpose. The Court said d,
,anks as we know them could not g..
lst If they could not rely upon av- ar
ages and lend large part of or
e money that they receive from w
elr depositors on the ASSUMPTION ~,
1T not more than a certain frac-
n of it will be demanded on anv +;t
DAY. If without word of false an
od, but acting from what we have @ of
led dlsinterested malevolence, t;o
N by persuasion should organize mo
1 carry into effect a run upon a ,na
TX and ruin it, we can not doubt 49,,
It an action would lie. A similar ,rh aL
ult, even if less complete in it's an, m
ect, is to be expected from the
lrse that the defendants are al +,a
ed to intend, and to determine fo. 60.
ether they are authorized to fol- oo1
that course, it is not enough to 80
er to the general right of a hold ;to,
OF checks to present them, but it WI
necessary to consider whether the n;,
ection of checks and presenting I'm I'm
N In body for the purpose of the e
aking down the petitioners bus n;o %
IS as now conducted is justified s,.; p,G
ene Interior purpose in view
do not need aid from the de- IA
IS upon the statute under which IN
Reserve Banks exist to assume
the United States did not intend f
mat statute to sanction this sort dem
warfare upon legitimate creation the
he States" in
MS instance of dictatorship by gust
arrogant bureaucracy will do y.
TO discourage bestowing simi- part
powers upon governmental al
IDS in the future. 81
attn,
ss C,.- Micl