District City Council member Douglas E. Moore, long an out spoken critic of Washington's business establishment, has joined a drive by the city's bankers to bring a branch of the Federal Reserve Bank of Richmond to the nation's capital.
Council Chairman Sterling Tucker, now a candidate for D.C. Mayor, earlier supported such action in a formal resolution.
Although metropolitan Washington is the eighth largest urban center in the country, the area is the only one of those markets without a federal Reserve bank, or branch. Moreover, 40 smaller metropolitan areas across the nation have such facilities.
According to leaders of the District banking industry and suburban financial institutions, they now are at a market disadvantage compared with bankers in other cities in terms of services provided by the Federal Reserve System to member commercial banks.
Although the Federal Reserve Board of Governors dorects operations of the nation's central banking system from its headquarters in Washington, actual exchanges of cash and direct relationships with local banks are conducted by Federal Reserve Banks in 12 regions of the nation or branches of those banks.
The Fifth Federal Reserve District includes D.C. Maryland, Virginia, West Virginia, North Carolina and South Carolina. A Federal Reserve Bank for the region was centrally located in Richmond in 1914 and branches were established and Charlotte.
Council member Moore (D-at large) introduced a resolution this week calling for establishment of a third branch of the Richmond bank in the District. He said he excepts no opposition to the measure, which may come before the city's legislature next Tuesday.
"It's very important that we make this effort now," said Moore, who is running for chairman of the Council. Location of a Federal Reserve branch in Washington would "help the banking community and help the community economically . . . D.C. should not be just an administrative, excutive and judicial center, it also sholud be the financial capital," Moore said in an interview.
And J. Robert Ritenour of American Security Bank, who heads a D.C. Bankers Association commitee established to seek a federal Reserve branch here, said:
"The important bottom line for D.C. is that not having a Federal Reserve facility means loss of business and revenues to its banks and consequent loss of taxes and wages. Not only would a Federal Reserve facility bring these benefits to the city, (it) would provide jobs where there is the greatests need."
Moore said he will seek a meeting with Federal Reserve Chairman William Miller, local banking representatives and a member of Mayor Walter Washington's staff to discuss the branch drive.
To date, appeals by D.C. bankers to the central bank here and the Richmond bank have been rebuffed. The Richmond Federal Reserve Bank currently is moving into a new, $55 million headquarters that has helped changed that city's skyline and plans to start construction in about a year for a new branch in Baltimore.
Although Washington area bankers say central bank services to them will not improve with the constrution of these new centers, the president of the Richmond bank disupted of the Richmond banks here are treated as well "as banks in any city" across the U.S.
President Robert P. Black said yesterday there is no justification to spend "millions of dollars" for a D.C. branch when no better services could be provided. Washington is located some 40 miles from a branch in Baltimore and about 100 miles from the main bank in Richmond, he noted.
Black said D.C. area bankers actually receive some special advantages under the current system - for example, free delivery of Currency and coin to Washington area branches from Baltimore, a service not provided to branches of banks based in Baltimore.
When the Treasury Department decided to cut costs and close a cash facility long used by Washington banks, the Richmond Federal Reserve established procedures unique in American banking to help credit accounts of the area's banks instantly when government checks are cashed, Black said.
The Richmond bank president said the absence of a central bank facility in Washington was a "historical accident . . . if we were starting from scratch, a bank might be located in Washington." But since established facilities already offer adequate services, the expense of a new branch now cannot be justified he stated.
American Security's Ritenour said, however, that as the site of federal agencies, increasing numbers of major corporations, trade association, embassies and international financial organizations Washington "Would greatly benefit" from location of a branch here.
"Many organizations are relutant to transfer their banking to Washington because of the lack of availability of immediate credit" he said.