Every evening, Wilmington daily commercial. (Wilmington, Del.) 1878-1928, 1922-09-25
FIGHT OVER CHECK COLLECTIONPLAN


nearly $4,000, 100000. Now whom New
York, at the end Of tho day, finds she
owes Chicago y10,000.901 as tht diff
ference in the balance. a telegtsphto
instruction is sent to the FedsrAg Re-
serve Board at Washington. III tells
the boards officers in charge "A tho
fund to make an entry on the books
of the fund transferring $4,000 ,0D0 Of
New Yorks gold 20 the credit Of Chi
cago. The very next day the situa-
ton may DC reversed in which case
Chicago viii telegraph instructions %
shift the ownership back TO New York.
Big Economic Saving.
Telegraphic ciearsnces arc rnads
every day by all ~ Federal Reserve
Banks which, in turn, are acting as
clearing houses for the member banks
In their districts. There q a con-
slant shifting hack and forth of the
ownership OF this gold. The big
economic saving Is that there is no
loss in the float because all the time
this gold is serving as reserve for
note Issues and the risk Of loss by rob
berry, by wreck or fire TO which actual
shipments constantly were exposed
disappears entirely. Also, the banks
save the express charges which they
formerly had to pay on the shipments
as well as the heavy insurance rates.
This saving accrues chiefly to the
banks themselves. The greater saw
ing accrues 70 the public The banks
+ passed on 10 their customers. so far
| as possible, the cost Of all this ship
ping and they made what profit they
could from the various transactions.
, The collections OF 10 To % cents on
( 500 would amount to big figures on
81 900 and 81 900. 900 checks. II total
led about s75. 900 900 a year. This now
is all saved by the public.
II IS a rule that all banks which
are members Of the Federal Reserve
? System VIII cash checks without
charging these fees. 40 most Of the
big banks OF the country are members.
10 is seldom that the fees are en-
countered excepting in some OF the
! Southern States. In the South, how
q ever, hundreds Of banks have refused
! TO join the system and participate IN
!. this par check collection. These banks
81 desire 10 continue the collection OF the
n exchange fees as they regard g az one
{ of their principal sources OF reve-
2 nue..
A strong campaign has been carrie,
= on by them against the system and
II they have argued that II is a part oi
n the general aggression of the rnon~y
10 trust which controls the big banks q
J. force the smaller institutions ont Of
II business by depriving them Of thi,
70 source OF revenue. They have de.
"A clared that the Federal Reserve Bank,
4 a = L
N ness and even Of legality In extend
\ ing the system and have sought q
n coerce small banks 20 enter the sys
,s TEN by discriminating against then
~ and attempting their ruin.
! There have been lawsuits in whicl
"A the Federal Reserve Banks have beel
- rebHked for coercive nnea sures and Il
- which the constitutionality Of IN
:. plan and the propriety Of It's genera
= scheme have been upheld Both side
have won rounds and the fight wa
thought 20 be over. as nearly the en-
=" tire country now is on a par colIec
!" ton basis. when the Chamber Of Com
rnerce sent out its referendum cues
a tionnaire
" The Chamber asks its business-rre
~ members whether they wan, the oil
sh system Of paying 20 have check
IN cashed or the new system OF having
All check pass for It's face value in III
w. same manner that a piece Of Unite
n States currency passes.
as The result viii be known in a Re
u weeks. It is expected that the ma
%. jority of business men will vote
It favor OF the par check system, but
'er fair vote is expected on the other SIT
as because many business men viii I
found in sympathy with the sma
nd Southern banker who wants TO sta
pit in business and requires this sour,
TO Of revenue TO assist him.