Albuquerque evening herald. [volume] (Albuquerque, New Mexico) 1911-1914, 1913-12-23
HOw the New Administration Currency Bill Is Expected
to Work in ReUOlutOnizing National Monetary System


Affiliations or own bank stock during
their service This board will oxcr-
else general control over the entire
iHystem.
The temporary organization conn
mittcc.' or the federal reserve bonrd,
viii select from eight 40 twelve cities
where regional reserve banks shall be
! located, and will divide The entire
country geographically with these
cities as the centora Of districts. The
national banks In % district VIII DE
required TO subscribe for the stock
of the regional reserve bank In that
district and 90 keep a portion Of their
reserves There.
Local banks viii be known as
"membee banhs,' because they will
! own the stock of ihe regional reserve
bank ~ their district Each member
bank viii DO required TO take capital
stock out of the regional reserve bum.
equal 90 six per cent of the memncl
banks capital and surplus. The cape
/ iial OF the regional bank will increaec
or decrease 50 that IL always repro
SCENTS six per cent Of the combined
/ capital and surplus of all the hanka
OF tho district that have Joined the
system.
/ A National hanks are compelled ga
/ ibin and state banks are permitted
10, " they bring their reserve require
ments up 90 the standard SET for ma
| tiOnal banks ana submit Co national
examinations.
Public ownership or the stock 81
! the regional reserves hanks Is per.
mittcd only IN case enough banks On
not Join IN any district to provide .
capital stock OF s4.0p0. 600. in such
event the public may purchase the
stock in quantities limited 10 $4,000
for each individual; but the voting a.,
this stock will be placed In the HANDS
Of government representatives on the
board Of directors Of the regional re-
serve bank.
The regional reserve banks may do
| business only With their member
banks, not with the public, except
that certain open market opera
/ tons such ~ the purchase and sale
Of gold, government or municipal
| bonds ana certain forms OF bills OF
exchange are permitted. These banks
will make their earnings from the
loans made 20 member banks and
| from the purchase and sale OF bonds
and foreign bills of exchange.
Member banks will bee compelled
| Go put up In cash only one-hulf Of
their subscription 90 tho capital OF
| tho new banks: The remainder can De
called for 90 needed by the regional
banks Dividends Of six per cent
Will be- paid on this stock TO member
banks and this stock will be nom
taxable. After these dividends are
paid one-half Of the surplus net
earnings goes to create regional
surplus fund and when this has
reached forty per cent Of the region
al banks p1id-in capital these earn
ms, are 10 90 into the United states
treasury. Tho remainder Of the not
earnings are to be paid Go the United
states as franchise tax and the cree
alton of "a fund To- guarantee the pay
mcnt OF dcpusitors in member banka
that may niL
! Win the machinery thus created
/ for new banking system that is sup.
Elementary to the commercial banks
90 thc country the law provides lot
H. gradual transfer ot part of the bunk
reserves 90 these new "rcserVoir"
banks. lu order not Co disturb bust.
ness conditions or to withdraw too
suddenly the heavy deposits of ooun
! try banks boo the large cities the law
provides that two years may be con-
sumcd in shifting these balances and
! That " necessary, part of the reserves
transferred Go the regional banks may
consist OF commercial paper
from every hank under the new law
and tho place whore IL must bee kept
arc ass follows;
Country Buuks-F rive twclfths must
Dee Kept lu the banks vaults for two
years and four-twelfths after that
time. For the first year t,yo-twclfths
must be- kept IN the regional bank. in
orcasiug onc-twelfth each six months
Thereafter until it reaches five
twcitths Of the total reserve. For
three years the Inallotcd part of tho
r'sorNrf may De kept IN tho banks of
reserve cities: after that time il must
Pee kept either in the country brnks
vaults or IN the regional reserve
bank.
Reserve city Banks-Totai reserve
required fifteen per cent Of domand
ana five per cent of time doposits.six
Htteonths must he kept in the banks
vaults for the first two years and five
tiftoonths after that time. Three
tiftecnths must Do kept i1 the region
al reserve bank for the first year. in
oreasing onc-liroonth every six
months thereafter until u reaches six
fiiteenths. For three years the uu-
allotted portions reserve may be kept
In other banks In Its own vaults for
regional banks; after that time in ono
oi the latter two places"
Central reserve city banks CNcw
YORK Chicago and ST. Louls). Total
reserve required. rs per cont of de-
mnnd ana per cent OF time deposits.
SiN-oiphicenths must bee Kept IN tho
banks own vaults; seven eightoonths
In the regional reserve bank for the
INST six months and the remaining
iiNe-cighlccnths in either place the
bank may choose
These immense funds 81 reserves
from member banks" together with
government moneys viii make up tho
deposits of the regional reserve banks
Each of those banks viii Doe admins
tered hy board of nine directors. six
"t whom viii be- elected boy the banks
end three appointed By the federal