Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-02-10

Government and subscribing banks
The Association is TO act as the fiscal
agent az the Government and receive
its deposits 1t will also receive de-
posls from subscribing banks and no
others. The Association is allowed 10
invest in government or state securi-
ties. securities of foreign governments
and gold coin or bullion
The National Reserve Association Is
given the authority To re-discount for
ills subscribing banks at uniform rates
and with the subscribing bank en-
dorsement. notes and bills of exchange
arising out Nof commercial transactions
These notes ana bills must have i
maturity of not more han 2S days ana
must have been made 80 days prior to
re-discount, These notes and bills
are carefully distinguished from notes
or ILLS issued for the purpose of car
rSing stocks or bonds, which cannot
be re-discounted with the Reserve
Association.
Further provision is made for the
red iscount of commercial paper hay
ing more than % days To run upon the
endorsement Of the local association,
and in exceptional cases, under re-
strieted conditions, including the APP
prevail of the Secretary of the Treas
ury. authority is granted for the dis
count of the direct obligation of
subscribing bank.
TIE authority is given to- national
banks with certain limitations 10 ac-
eept bills % exchange arising out Of
commercial transactions, and under
prescribed conditions the Reserve AS
sociation is authorized to purchase
from subscribing banks acceptanees
of described character and certain
foreign bills of exchange.
The bill prescribes the reserves re-
quircd of subscribing banks, both on
demand and time deposits. the reserves
on demand deposits being the same
percentages as required of national
BANKS under the present law
Against it's own demand liabilities.
the National Reserve Association Is
required to carry = 50 per cent reserve
in gold 1r lawful money with a penalty
ii a graduated tax in ease of def
cheney. and a suspension of the right
10 issue circulating notes in case the
ratio Of reserves To notes alone falls
IL 33l-S per cent This is modified
to some extent by making allowance
for aonds securing circulating notes
which may be purchased from national
banks.
The bill contemplates the retirement
of national bank notes, by a purchase
of the bonds securing this circulation.
and the issue bv the Reserve Associa=
ton of its own notes to meet the bust
ness requirements of the country.
An oyer-issue of notes by the Ma
tionai Reserve Association is further
guarded against by providing for Il
tax of ~ per cent when the total
issue exceeds by S9oo,o00,0e0 the cash
reserve. and a tax of 5 per cent when
the excess reaches s1.200 100000.
To facilitate foreign commerce au-
thority is given to the Reserve Assoc
ciation to establish and maintain for
eign agencies for the purposes set
forth in the bill There is further pro-
vision for the formation of banking
corporations to do business in foreign
countries.
The functions of clearing houses
MAY by the terms of the bill, and III
certain cases must, be taken over by
the local associations
National Citizens League of New
England.
BY A. Fl. WEED. Secretary