The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-09-23
Frederick Haskin' S letter
fisk Ooer Check Collection Plan.

NOW wnen New YORK. at the 49,
the day. finds she owes CHI
SIC. COZ. 900 aa the difference q
balance, = telegraphtc instruetie {
Is sent to the federal reserve 49,
at Washington. 1t tells the bcar1,s
officers in charge Of the fund &
make an entry on the books Of -
fund transferring $4,000. 80 q
New York's gold to the credit =
Chicago. The very next day IL
situation may be reversed, IN vhicA
case Chicago will telegraph iastruc.
tons to shift the ownership back to
New York.
Rig Economic Saving.
Telegraphic clearances are mai
every day by all IL federal reserve
banks which, in turn. are acting =
clearing houses for the memher
tanks in their distances There Il
a constant shifting back and forth
OF the ownership Of this gold. Tbe
big economic saving is that there il
no loss in the float because all The
time this gold is serving as reserve
for note issues and the risk Of iosa
by robbery, by wreck or fire 70
which actual shipments constantly
were exposed disappears entirely
Also the banks save the expfess
charges which they formerly had to
pay on the shipments as well as Tia
heavy insurance rates.
This saving accrues chiefly to fhs
banks themselves. The greater
saving accrues to the public. Ths
banks passed on to their customers,
SO far as possible. the cost OF all
this shipping and they made what
profit they could from the various
transactions. The collections Of
10 to Is cents on 800 would amount
to big figures on $1,000 and $1,000
900 checks. 1t totalled about S7s,r
100000 q year. This now is a.
saved by the public.
1t is a rule that all banks which
are members Of the federal reserve
system will cash checks without
charging these fees. AS most OF the
big banks OF the country aye mem
bers, it is seldom that the fees are
encountered excepting in some Of
the southern states. In the south.
however, hundreds Of banks have
refused to join the system and par
ticipate in this par check collection
These banks desire to continue the
collection Of the exchange fees Is
they regard It as one of their prin-
cipal sources Of revenue.
A strong campaign has been car
ried on by them against the sys-
TEN and they have argued that It Is
a part Of the general aggression Of
the money trust which controls the
big banks to force the smaller In
situations out of business by de-
priving them Of this source OF reve-
nue. They hare declared that the
Federal reserve banks have over
stepped the bounds Of fairness and
even the legality in extending the
system and have sought to coerce
small banks. to enter the system BY
discriminating against them and at
tempting their ruin.
Z; There have been lawsuits In
which the federal reserve bank
have been rebuked for coercive
measures and in which the consti
nationality Of the plan and the pro
priety Of its general scheme hav'
been upheld. Both sides have VOL
rounds and the fight was thought II
be over, as nearly the entire coun
try now is on a par collection basis
when the chamber of commerc,
sent out its referendum question
naire.
The chamber asks its business
men members whether they wan
the old system of paying to havt
checks cashed or the new system
of having a check pass for its fac
value in the same manner that I
piece Of United States currenc.
passes.
The result will be known IN {
few weeks. 1t is expected that TIL
majority of business men will vote
in favor of the par check system
but a fair vote is expected on tn
other side because many business
men will be found in sympathy With
the small southern banker who
wants to stay in business and n
: iquires this source OF revenue to -
. sist him.