The Birmingham age-herald., 1923-10-12
FEDERAL RESERVE BOARD PRAISED AS CREDIT STABILIZER
Congressional Committee In- vestigates Failure Of State
 Banks To Join System

WASHINGTON, Oct. 11l--Par co.'s lection of checks and the placing of all banking under federal supervision were among the measures urged to- day before the joint congressional committee Investigating failure of state banks to enter the reserve sys- tenn.
 J.H. Trego of New York, secretary treasurer of the National Association of Credit Men, advocated both pro posals, while W. w. Orr, assistant of the association, stressed the desire for par collection in his testimony.
 Declaring banking was one of the functions belonging to the federal government. MT. Trego said his as- sociation advocated the operation of tho banking business under national law. There are too many banks, he said, and Congress should enact a measure under which nonmember banks would be denied the privileges of the federal reserve system. This would have the effect. he believed. of not only bringing many banks in that system but would also contrib ute to winding up the affairs of those not required.
 Far Collection Urged.
 Par collection of checks was urged by Mir. Trego as of the utmost inn portance to the business of the coun- try. Checks, no said, have become currency and about 95 per cent Cf all business is conducted in that way. Under the federal reserve system, he continued par clearance mas been re- dtced to an infinitesinal cost which the banks and not the customers should stand. Unless par clearance is made general, he predicted invoices soon would be made payable only in checks drawn upon banks subscrtb- ing Go par collection.
 Tho witness asserted the federal reserve board had accomplished more than even its warmest friends had hsped and that if properly sup ported and kept out of politics will keep tho country out of panics." In 1920, he asserted. it had prevented appalling losses. he denied the de- fIstion in that year had fallen more heavily on agriculture than on other lines of business.
 eve are in crisis" he said. eve cannot have the entire world out of order without feeling it. The busi- ness world is now struggling with high costs. That is our problem and we are trying to cut down costs"
 Mir. Orr testified that unless the banks generally agreed to par collec- tion the result naturally would be the transfer of balances of smaller banks to the larger centers with per maps a IGLuIu IO llS OAQ RA aSbASo OA requiring bills to be paid in New York drafts.
 Edward Bains a Philadelphia manufactures, told the committee there was feeling among the banks that the regulations under which they operated were unnecessarily irksome. He urged measures to in- fluence national banks against sur rendering their charters and operat- ing under state laws.
 Governor Crissinger of the federal reserve board, in response to the question of the board, submitted sta- fistics on various phases of the work of the system frorn its organization to the close of the last fiscal year. During that period the federal re- serve banks had paid into the treas ury. as franchise tax. he said, s1S5.e0O,0 900 out of gross earnings of s572.s5s.00e. Their expenses had been s153 3,0o0.000. To date, the buildings erected by federal reserve banks had cost S63, ,60o, ,oee, which had been paid out of the surplus of the banks.