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

washington. Sept ga banking
fight OF nearly 10 years duration mas
fared up again as the result OF the
issuance by In Chamber of Commerce
OF the United States OF referendum
on the question OF tho par collection OF
checks through the Federal Reserve
System.
Since the war In Europe turned pub
JIG thought into international channels
great deal has been read in the press
about foreign exchange. IL so happened
taat IL was just about the same time
that domestic exchange began TO dis
appear and 30 that feature Of finance
has been practically forgotten by bus
incss men and others who haze checks
! IL GAIA
In reality there In no theoretical df-
| ference between foreign exchange and
domestic exchange. Exchange Is the
difference in debts OF two communities
| In domestic exchange these comnuni-
J tics are cities, counties. or, perhaps
| States. In foreign exchange they are
countries and continents.
There are many business men who
will remember that when they received
check drawn on a bank in any city
but their own they could not cash II
without paying an exchange fee. The
charge on a 500 check would rur
anywhere from 10 cents to 25 cents
This was supposed to result from the
| fact that the owlngs of one community
| to another were not balanced ant
therefore exchange must be paid. AS ;
matter Of fact IL was more often mere
ly a collection charge imposed by th'
bank which cached the check.
When the Federal Reserve Act wa
passed, 10 contained a provision de
signed to do away with this charg
on the public. II provided n par checl
collection system This system wa
put into operation almost immediatel
and has been working successfull.
In nearly every section OF the countr
ever since.
Par collection OF checks is operate
, by means OF what is known as the Col
Settlement Fund. This fund Is actua
, gold in tho form OF bullion or COR
Each Federal Reserve Bank pay
into this fund an amount OF gold
relation 10 It's volume OF business
IL a pool jointly owned by all the
; Fedeeai Reserve Banks
In the days before this system OF
Grated, the balancing Of accounts {
the clearing. as il was called, was q
elaborate matter. Take for instance. II
relations between New York and Oh
cago. On given day certain amour
of money would be drawn on Chicaf
banks and the checks would be cashs
A., In New York. On the same day a
4, amount OF money would be drawn {
New York banks and tho checks ca 81
,, ed in Chicago. On given day ChicaE
would cash more New York checl
;, than New York would cash Chlcal
=, checks The accounts would not ba
q ance. Consequently, New York ow
money to Chicago. The New Yo
:, banks actually would be required
bundle up and ship notes, gold or al
n kind OF available legal tender by e
% press.
~ AS the accounts were changing fro
q day to day, not only between Ne
n York and Chicago but between ali ci
y les in the United States, there was
70 constant crise-cross OF shipments
10 gold and money. II was the hey-di
o OF the train robbers. II will be Sc
that while this actual money was
process OF shipment, subject 70
the delays and risks OF traneportatic
+. was not in use. This money in ira
sit is known in banking perlance
1.-The float" The float has been es
mated at as much az $1,000 900, o
The interest on $4,000, 600. 900 conetal
ly out Of use is a big item-at !
cent It IS s25,00O,0O0 year. This "
a dead loss.
Under the Gold Settlement Flu
plan. the general pool Of gold is Ike
ar Washington. Il now amounts