New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-10-20

o,roir,od hv the President Of the United
States from list of names submitted
bv the board of directors ana mat the
President should also have power 10 re-
move tho governor. The revised plan re-
eervee tho right of removal 10 TWO
thirds vote of the board.
A state bank or trust company. TO be
eligible TO membership, must conform
N the same standard as national banks
regarding the relation of its capital to
,bo nonuIation or the community II
serves and regarding the reserves to be
held against deposits, and 1t must con-
form 10 a certain standard regarding
examinations and reports
The modification of the reserve provi-
sion is expected TO make IL more profit
able for national banks TO hold time de-
=, ats In competition with trust compa
mics. 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.
4 provision that the association sna!l
discount for any member notes ana DllIS
of exchange arising out OF commerciii
transactions is further developed IN the
line Of preventing the granting OF loans
on securities. The notes and pliis ell
gibe for discount by the ASSOCIATION are
restricted to such notes and bills or eN-
change as are ISSUED or drawn Tor agrl-
cultural industrial or commercial pur-
poses. and not for carrying stocks, ,DonuS
or other investment securities rms IN
terpretation will exclude brokers notes
for carving stocks. Banks under TINS
provision. it is said, will be encouraged
TO carry their auxiliary reserves IN com
mercial paper, instantly convertible INTO
cash. instead Of in cali loans on the STOCK
market.
Savings deposits in any Of the banks In
the association shall be subject 10 thirty
DAVIS notice before withdrawn ana shai.
be covered by a reserve or ~ per cent Dl
that required for demand deposits IN the
same locality. 49,.
Another new provision specifics that
any local association may assume anu
exercise the powers and functions OF
clearing house In this respect some eN-
ietins, clearing houses are expected 10
hecone local associations. All local as
sociations will be required to appoint eN-
trainers which is a development OF the
movement for local clearing house ex-
aminers. now beng promoted throughout
the country.
One criticism Of the first plan was mat
there was no way 10 remove a Dahh
from an association. 1t has been pro-
vided that a local association may sus-
mend a hank which fails TO MAINTAIN us
reserves or comply with other require
ments of the law. ,.,o
If is also provided that the note issue
NJ the association shall at all times De
covered by at least one third IN gold or
other lawful money. Any notes now :
ever issued in excess Of $9OO,OOO.OOO
must either be covered by lawful money
in full or pay a special tax at the rate
of ~ per cent year. Any notes issued
in excess OF s1,200,000,O00 not covered
by lawful money will pay a tax OF
per cent -
Mr. Aldrich. in transmitting the plan
10 the commission. said that the system
Of reserves and taxes provided is eX-
pected ito insure the maintenance or
adequate reserves by the association and
otherwise to provide such effective regu-
lation Of discounts and note issues as
would enable the organization TO respond
promptly at all times TO normal or UNI
usual demands for credit or currency
without danger Of undue expansion or
imitation