The Richmond palladium and sun-telegram., 1913-12-29
The Currency Reform Bill.

serve banks to act as strengthening elements IN
the banking and financial world, passed the SEN
ate on the night of December 18, by vote of
81 to 34
The essential features of the currency bill
are:
The secretary of the treasury and two mem
bers of the federal reserve board are to constl-
tute the organization committee.
This committee is to designate not less than
eight nor more than twelve reserve districts IN
each of which a federal reserve bank is to be
established.
Each reserve bank must establish branches
within it's federal reserve district at such places
as are approved by the federal reserve board.
Capital stock of the reserve bank is not trans
ferable and can not be hypothecated. When
member bank increases its capital stock its sub
scription to the reserve bank must be increased
correspondingly.
Among the powers vested in the federal re-
serve board are:
To require reserve banks to discount the dis
counted paper of other federal reserve banks at
rates of interest to be fixed each week oftener
to suspend for a period not exceeding fifteen
days any reserve requirement specified in the
act; to authorize members to use reserves, fed
eral reserve notes based on United States bonds
to the extent that the board may find necessary
to grant national banks applying therefor the
right to act trustee, executor, administrator
or registrar of stocks and bonds.
A federal advisory council is created to con-
sist of as many members as there are reserve
districts. This council is to meet in Washington
at least four times year and may hold sessions
elsewhere.
Federal reserve banks are empowered to re-
ceive from member banks and from the United
States deposits, currency notes of various kinds,
checks and drafts, etc. They shall have the
power to discount notes, drafts and bills of ex-
change arising out of actual commercial trans
actions, but such paper does not include notes
drafts bills of exchange covering merely in
vestrnents issued or drawn for the purpose of
carrying or trading in stocks, bonds or other in
vestment securities, except bonds and notes of
the government.
Provision also is made that notes, drafts
and bills drawn or issued for agricultural pur-
poses or based on live stock and having ma
turity not exceeding six months may be dis
counted in an amount to be limited to a percent
age of the capital of the federal reserve bank, to
be ascertained and fixed by the federal reserve
board"
Any federal reserve bank may discount ac-
ceptances based the importation of exporta-
tion or domestic shipments of goods, and which
nave maturity at C1Ine OF discount OF not more
than three months and indorsed by at least one
member bank. The amount of acceptance so dis
counted shall at no time exceed one-half the
paid-up capital and surplus of the bank for which
the rediscounts made.
The aggregate of such notes and bills bearing
the signature or Endorsement of any one person.
company, etc, rediscounted for any one bank
shall at no time exceed ten per cent of the unn-
paired capital and surplus of the bank; but this
restriction does not apply to the discount of bills
of exchange against actually existing values
Reserve banks are authorized to engage in
and make loans thereon; to buy and sell at home
and abroad, either for domestic or foreign banks
corporations, etc.; handle transfers and bankers
acceptances and bills of exchange of the kind
and maturities made eligible by the act for re-
discount with without the Endorsement of
member bank; to deal in gold coin and bullion
dmake loans thereon; to buy and sell at home
or abroad bonds and notes of the United States
bills, notes, revenue bonds and warrants issued
in anticipation of the collection of taxes by any
state, county, district political subdivision etc.
in the continental United States; to establish
rates of discount subject to review by the federal
board; to open and maintain banking accounts
in foreign countries and generally to deal in bills
of exchange.
Every federal reserve bank shall maintain
reserves in gold of lawful money of not less than
thirty-fve per cent against its deposits and its
federal reserve notes in actual circulation, but
the amount of gold in the federal reserve bank
together with the amount deposited by it with
the treasury, shall be at least equal to forty per
cent of the federal reserve notes issued to the
bank and in actual circulation and not offset by
gold or lawful money deposited with the federal
reserve agent.