The evening world., 1913-12-27
BANK FOR BANKERS" HERE
WILL Be THE GREATEST IN
NEW CURRENCY SYSTEM

IN Washington. one OF whom = to bs
designated as the Federal Reserve
Agent. and who Siii he chairman Of the
local board. This man will bs the sll
important factor In directing active %.
crations
sx directors will be chosen by the
member bsnks. ~ whom three will Be
from among their own ofneers and
three othcts representing the ouslnsoo
con immunity. who are not to hs ofhoess
or employees OF any bank.
These nine directors will hold q nses.
ing to organize for operating the new
bank. They will choose . president Q
viee-president and such other oficsrs -
may b necessary to handle the t09i.
ness.
Thsn. when the day 10 hxsl to spsn
the doors, the of1csfs and eisriu Will
take their places and vsit for custom.
ers. No deposit accounts With indi.
vtduals will be opened. Nor viii ioano
under ordinary circumstances. be ma4s
to individuals.
The Federal Reserve Bank Of New
York Will have for III only oustemsss
and deposnors The banks Who have sub.
scribed TO lie menioership. The bvsi.
ness that banks will DO with the aAW
Institution will be chiefly in rs.discount-
ing short term commercial p>p,r. not
exceeding ninety Gays. This means that
when a merchant roe, 10 h,s own baak
and asks for . loan on his note. be VIII
have a far better chance Of getting 80
commodation than he has haA In the
past. because the bank. Instead Of hav.
ing 10 carry the loan itself. can take
the notes. or commercial paper, ~ Il v
termed. over 10 the Federal Reserve
Bank and deposit them there and sse
cash to reimburse itself.
THE SMALL MERCHANT WILL
HAVE A ohoW.
Thi, does not mean that thers viii h
n letting down Of the bars Of sound
banking judgment and reckless makinx
Of loans to persons without good credit
The bankers viii see to that In the
hrst Instance, because they have to In.
dorss the paper and become responsible
before taking II over to the redsral
Reserve Bank But the old excuse that
money 10 uEht or that reserves sre too
low. Of any OF the other svas'ons that
nave been gwen TO reputable msrchsnD
WIN 1000 c'e0" IN umos pses vnsn
tney soueht accommodation ~ umee
wnIa MAN suee' speeu'.sos "ee ~
sy.,, @ rhs sm.n eis,s:, i. !" h.~. =
show.
II the existing banks should combine
TO contract efeo'ts. the Fensral baak
has the right to 20 Into tho open mar
Net ana do direct business IN COM
mercaal paper ~suost act'ns tnrousn
J tho intermediary Of the oanks Whhe
! ln will not seek thess direct dsa''ngs
7 With -bds.neo men. yet the power re-
!, mains IN II to DO % N oreef 70 rea'eve
1 credit strin9snciss.
In practical operation. the member
banks caa deposit any day = lar1e
amount OF SOUND short term CONNER.
, cinl paper. duly indorssd. meaning notss
r Of lie customers TO whom Il has made
: loans. and obtain from the Federal
, Bank now currency or have the sum
credited 20 Its account on tho books
. There are n variety Of sAfeguards
4 thrown around these transactions and
!. provision made for conductiAS . sound
4 and safe banking business.
a For example. the Federal Bank mus
y keep a gold reserve equal to one.thirt
= the amount Of discounts. whether taksr
out In money or credited on the books
!. FEDERAL ReaeRve NoYeA
...,. .,,...>,.
a
!, " IN" fe"erA SANK IN 'hese transae
!, 'ohs s'hpi! "hed 'he money now u
cN'S'encc' dra"n from o'her osmHs
- thsre would he no einsi'c expansion an'
contraction OF currency. which 10 D
y much desired In n financial system
u hut II has the power TO issue ne,
q nancy. backri by the United State
10 c,y.,rr,n, on ,h. ,omm.rc,a, o>ns
r. ,,....,.a =. ~. o,,..s..
\, " DC oo"'" foVsr" "ose'Vo n"'e'
=. rhey look no muen IKE orhhary oah
= notes that tho general puohe VIII nc
~ not.re the difference.
a. Al. .eney win be issued to the m."N.
IN