The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1911-11-21

81. To insure the maintenance of
adequate reserves by the Association
and its members, with such provisions
for discounts and note-issues as shall
enable the organization to respond
promptly at all times to normal or un-
usual demands for credit or currency
without danger of undue expansion or
imitation.
"2. To provide for concentration Of
the cash reserves of all the banks to
be used for the assistance and support /
of any, under assured decentralization
of control. Scattered reserves have
been found useless in times of pres
sure. Deposit balances in the Re |
serve Association are to be counted as
legal reserves.
%. To authorize the Association to
rediscount, through its district
branches under local control. CONNER
cial paper of a definite character for
individual banks, to be used in replen-
ishing their reserves.
"a. To give to individual banks the
facilities for an increase of their re-
serves and loaning power which will
enable them to adopt, the policy which
has been universally effective in other
countries of allaying excitement, Gre
ating confidence and preventing pan
les, by prompt payment of all demand
obligations as presented, and at the
same time granting a liberal extension
of credit to all deserving customers
in times of uncertainty and distrust.
%. To grant the power for further
note-issues to this cooperative asso-
citation of all the banks, and authority
which is now vested in national banks
scattered throughout the country, and
by requiring the Association to for
ward its notes to any subscribing
member at once upon application and
without charge for transportation.
Prompt redemption of all notes is re-
qired at the several branches of the
Association.
&C. To give authority to the Re-
serve Association to fix rates for re-
discounts, which must be uniform
throughout the country.
a. To give to the Reserve Associa-
ton power to protect its own reserves
and thus enable it at all times TO per-
form it's most important function, that
OF sustaining the credit of commune
ties and the country For this pur-
. pose the Association is required to
keep its assets always in liquid form,
= and its rediscounts and investments
J must be in short-time paper or securi-
ties. To enable the Association to
= strengthen its own reserves it may
t. first, attract gold from other countries
? by an advance in the discount rate;
second, purchase and borrow gold ;
> third, buy and sell foreign exchange
through its constituent members or
= its correspondents or agents in for
1 eign countries. A large portfolio of
t short-time foreign bills has been found
A elsewhere the most effective means
for increasing the gold supply of coun-
5 tries and preventing its expectation IN
!, critical times.
/, In order to establish a wider dis
l count market in this country the plan
establishes a standard of commercial
S paper, of notes or bills of exchange
. issued or drawn for agricultural, com.
t mercial or industrial purposes, which
/ are made available for rediscount at
e the branches of the Reserve Associa.
tlon; second, it allows national banks
4 to the extent of one-half their capital
f to accept properly secured drafts
e drawn upon them-drawn, perhaps
e with documents attached, or as against
cotton, wheat, or other products in
s transit or in warehouse 1t authorizes
the National Reserve Association tc
d buy and sell in this country ant
e abroad bills of exchange drawn or
n foreign countries, based on transac
e lions in American products or to pay
D. for our purchases abroad. 1t gives II
L this manner a national and interna
IS tional currency, a newer and wide
p market to notes, acceptances, anC
D bills of exchange based on the agri
4 cultural and other products of the
United States.
l. ut authorizes the organization o
Il banks in foreign countries to assist il
o. the extension Of our national trade.
"The dividends Of the Association t,
If its stockholders are limited to 5 pc
s, cent, and the Association, for the i'm
n portant privileges granted to it, pay
Is franchises or other taxes which ar,