9. Higher reserve requirements.
1o. Less ready access to the Comptroller than to the State Banking Department.
II. Personnel of the Board and Comptroller.
An examination of these objections will show that some of them are trivial and sentimental and that others have been dis proved by the facts. For instance, the objection that a great deal of red tape is involved in doing business with the federal reserve bank is not true; the federal reserve banks are conducted upon a strictly business basis, and transactions with them involve little if any more red tape than with another bank.
Reasons for Membership The following are some of the reasons prompting state in stitutions to join the system: 1. The state institution retains all its charter and statutory powers and in addition enjoys the advantages of the reserve system.
2. The economies of the par collection system, namely, the collection of its items at par, the economy of time, the closing of correspondent balances, the easy transfer of funds by draft or telegraph, the shipment of funds without cost, etc.
3. Ability to borrow from the reserve bank at lower rates than elsewhere, and with sure accommodation.
4. Ability to carry with safety substantially lower excess reserves, and to invest these in rediscountable earning assets.
5. The rediscount privilege, and the security it offers against panics.
6. The moral obligation to contribute to the strength and unity of the banking system, particularly in time of war.
7. The privilege of securing postal savings deposits and other government deposits.
8. Larger deposits from member correspondents permitted to members.
9. The prestige of examinations made under the supervi sion of the federal government.
Jo. Advertising value of membership in the system.
r. Better price for the acceptances of member banks.
12. The special services which the federal reserve banks are developing for their member banks free of charge, such as purchasing and caring for commercial paper for account of the members, etc.
The federal reserve banks have striven since the burden of the war was lifted to establish personal relations between the officers of the central and member banks, especially those situated outside the reserve city. To acquaint the members with the various ser
vices of the federal reserve bank and to explain the nature of its operations, member bank officers have been invited to the reserve bank in groups of, say, twenty-five, for the purpose of discussing banking operations, making suggestions for the improvement of the service, visiting the various departments, and outlining the policies of the reserve bank. The New York bank has established a "member bank relations department," with traveling repre sentatives who visit each member at least once a year and thus come into direct contact with its owner customers.
New Powers of National Banks The Federal Reserve Act and amendments also broadened the powers of national banks, so as to put them more nearly on the same plane of competition with the state banks. Some of these acquired powers are: i. To Act as Insurance Agent. Any national bank in a town or city with a population of less than s,000 may act as agent for an insurance company authorized to do business within the state. In this capacity the bank may solicit and sell insurance and col lect premiums on policies issued by such company, and receive therefor such lawful fees as may be agreed upon. The bank is prohibited from assuming or guaranteeing the payment of any premiums on policies so issued, or from guaranteeing the truth of any statement made by an insured person in filing his applica tion for insurance. These powers must be exercised under the regulations made by the Comptroller of the Currency.
2. To Act as Real Estate Loan Broker. National banks located in places with a population not exceeding 5,00o may act as broker or agent in making or procuring loans on real estate and may re ceive reasonable fees or commission for such services. The real estate must be located within roo miles of the place in which the negotiating bank is located. The bank must make the loans subject to the regulations of the Comptroller of the Currency and cannot guarantee either their principal or interest.