The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-10-20

possibility OF control by any section or
group. There Will still be forty-nve
directors. as in the original plan, six
members cX-onicto, viz, the governor
Of the association. his two deputies, the
secretary OF the Treasury. the Score
tary of and Labor ana the
Comptroller of the Currency.
Each OF the fifteen financial districts
OF the country will elect one director:
twelve others will be elected by the
shareholders. and these twenty-seven
VIII elect to the board twelve addi-
tional members. who shall not be Of
iicers OF banks. but may be directors in
them. and who shall fairly represent
the Industrial. agricultural. commercial
II other interests of the country.
The completed plan provides tina OF
the twenty-four directors in the latter
groups. not more than three may be
elected from any one district. As an
instance, the effect OF his provision
would be to limit the State OF New
York. which has about one-afth the
banking capital OF the country. and
which Is tho seat of the great financial
interests. to four directors among the
thirty nine who are elected.
In the organization of the executive
committee of nine members. upon
which 1t has been said much of the
active management Of the association
would fall. only one of the I'VE elect
ed membe (the other four being the
governor of the association, his two
deputies. and the Comptroller of the
Currency, ex-oficio) may be chosen
from any one district. The whole board
OF directors may reserve to itself any
authority 1t desires. and is not bound
the vest the executive committee with
full control
Ugh of Removal.
The original plan provided that tho
governor OF the association be appoint
ed by the President OF the United States
from a list OF names submitted by tho
board of directors. and that the Presi-
dent should also have power to remove
the governor. The revised plan re
serves the right of removal to a two
thirds vote OF the board.
One important change lis the admls-
sion to membership of State n ana
trust companies which conform TO n
required standard. A State bank or
trust company to be eligible must con-
form to the same standard as national
banks, regarding the relation of its
capital to the population OF the COM
munity 1t serves; regarding the re-
serves to be held against deposits. and
must conform to a certain standard re-
garding examinations and reports.
y u TcScTNoS 10 De nelQ
against deposits are made the Same
for national banks. State banks and
trust companies. but the present re-
serve requirements OF national banks
are modified to the extent OF requiring
no reserves against time deposits. ex-
cept for the thirty days preceding their
maturity.
This provision. which resembles
those in the trust company laws Of
some States. is expected to make 1t
more profitable for national banks to
hold time deposits in competition with
trust companies. Banks Of all classes
will have the full use OF time deposits
without reserve restrictions until
thirty days from ma turing time, when
standard reserves Will be required.
A provision that the association
shall discount for any member notes
and bills OF exchange arising out of
commercial transactions Is further de-
veloped In the line OF preventing the
granting of loans upon securities. The
notes and bills eligible for discount
/ by the association are restricted to
such notes and bills of exchange as
are Issued or drawn for agricultural,
industrial or commercial purposes, and
not for carrying stocks. bonds or other
investment securities"
This Interpretation will exclude
~ ~ " ing STOCKS,
Banks under this provision, IL Is said,
will be encouraged to carry their
auxiliary reserves in commercial paper.
instantly convertible into cash, instead
Of in call oans on the stock market
National banks Will have the right
to establish savings departments and
to lend not more han 40 per cent. OF
such deposits upon productive real es-
tate, in loans not exceeding so per
cent. of the value of the property. The
national bank act now prohibits such
loans, but there is a constant demand
for them, especially in the. West.
Savings deposits in any OF tho
banks in the association shall be sub
jcct to thirty days notice before with
drawal. and shall be covered by a re-
serve OF 40 per cent. of that required
for demand deposits in the same To-
caiity.
For the reserves of the association,
1t is proposed that so per cent. of its
demand liabilities. including deposits
and note issue, shall be covered by gold
or other lawful money, with n pro-
vision that whenever the reserve falls
below SO per cent. the association Is
bound to pay to the government a
special tax. which increases in rate In