Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1911-10-21

directors may reserve to itself any
Authority it desires and is not bound
| to vest the executive committee with
full control.
| Admission Of state Banks.
One important change Is the admis-
sion to membership Of state banks and
trust companies which conform to g
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 or regarding the re-
serves to be held against deposits; and
must conform to q certain standard re-
garding examinations and reports.
Requirements for reserves to be held
against deposits are made the same
for national banks. state banks and
trust co npanies, but the present re-
serve requirements of national banks
no reserves against time deposits ex-
cept for the thirty days preceding their
maturity.
This provisions, which resembles
those in the trust company laws Of
some states, Is expected to mako 1t
more profitable for national banks TO
hold time deposits in competition with
trust companies.
3. Notes and Bills Restricted.
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 dis
to such notes and bills Of exchange as
are ISSUED or drawn for agricultural,
Industrial, or commercial purposes. and
not for carrying stock bonds. or other
investment securities" This interpre-
tation will exclude brokers' notes for
carrying stock. Banks under this pro-
vision, 1t is said. will be encouraged to
carry their auxiliary reserves IN com
mercial paper, instantly convertible
the stock market
National banks will have the right to
establish savings departments and TO
lend not more than 40 per cent Of such
deposits upon any productive real es-
tate in loans not exceeding so per cent
Of the value Of the property. The ma
tional bank act now prohibits such
for them. especially In the west.
Withdrawal Of Savings Dep osits. Z
Savings deposits in any Of the banks
Of the association shall be subject TO
thirty days notice before withdrawal
and shall be covered bv reserve OF 40
per cent Of that required for demand
deposits in the same locality.
For the reserves Of the association 1t
is proposed that 50 per cent of It's de-
mand liabilities, including deposits and
note issues, shall be covered by gold or
other lawful money with provision
that whenever the reserve falls below
so per cent the association Is bound 20
pay to the government special tax,
which increases In rate in proportion
to the deficiency. The operation OF this.
in such instances, is expected to stim-
ulate an increase in the rate Of dis
count and to bring in gold until the re-
serves again becomes normal.
Another new provision specifies that
any local association may assume and
exercise the powers and functions OF a
clearing house. In this respect some
existing clearing houses are expected
to become local associations.
Examiners to be Appointed.
All local associations will be required
yelopment OF the movement for local
clearing house examiners now being,
promoted throughout the country.
One criticism Of the first plan was
that there was no way to remove a.
bank from an association. It has been
provided that local association may
suspend a bank which fails to maintain,
It's reserves or. comply with other re-
duirements Of the law.
It Is also provided that the note is
sue of the association shall at all times,
be covered by at least sone-third in
gold or other lawful money.
Any notes. however. Issued in ex-'
cess Of $500. 000. 900 must either be COW
cred by lewfu money in full or pay a
special tax at the rate<of TX per cent
a year. Any notes issued In excess Of
1900 100000 not covered by lawful
money will pay tax Of per cent.