Article Text
Reserve Bank Of Richmond Wins Decision WASHINGTON March 12-(P)-The Federal Reserve Bank of Richmond, Va., today was sustained by the Supreme Court in applying funds it had on deposit to the credit of the Farmers and National Bank of Lake City, S. C., to the payment of checks drawn on the latter bank recelved for collection after the South Carolina bank had failed. When the Farmers and Merchants Bank of Lake City failed in October 1926, had $22,088 on with the Federal Reserve Bank at RichThe on whether the Federal Reserve Bank could use this deposit balance towards the payment checks drawn on the Lake City Bank, which it had recelved for collection from customer banks, whether the deposit balance was an the failed bank which must be turned over to the The Federal District Court decided in but Circuit Court of Appeals held that under the contract with the Lake Cit: Bank the Federal Reserve Bank had the to use the deposit balance in payment checks it had received for collection drawn against the failed bank The receiver contested this ruling that the collection contract did not give the Federal Reserve Bank the apply the deposit balbut that returned must be the failed become part the decision of the Circuit Court of would result of the Reserve Bank being given at the expense of the creditors of the failed bank
