The Washington herald., 1913-06-19
Bill Provides for
Establishing Banks
in Reserve Cities

draft of Chairman Glass currency re-
form bill. Mr. Glass declared last night
that il differs in a number of funda-
mental features from the bill adopted
as the result of Tuesday nights confer
ence at the White House:
II provides first that within sixty days
after the passage of the bill the Secretary
of the Treasury. the Attorney General,
and the Comptroller of the Currency, act
ing as a reserve bank organization COM
mittee, shall divide the United states into
not less than twelve districts, each dis
trict to contain a Federal reserve city.
The bill provides that in each Federal
reserve city the organization committee
shall organize a Federal reserve bank.
Every Federal reserve bank shall have
paid-up and unimpaired capital at the
time of beginning business of not less
than S5,OOO,00O. To make up this capital
every national bank located within a
given district is required to subscribe 10
the capital stock of the reserve bank of
that district in a sum equal to 20 per cent
of its own unimpaired capital.
Each Federal reserve bank is authorized
to establish branch Offices under the
regulation of the Federal reserve board
in the district in which it is located.
Section of the bill requires the Federal
reserve banks to become Incorporated and
provides that each shall have succession
for a period of twenty-five years from its
organization unless sooner dissolved by
act of Congress.
Every Federal reserve bank is to be
organized and conducted under the over
sight and control of a board of directors,
whose powers shall be the same as those
conferred upon directors of the National
Banking Association under existing law.
There are 10 be nine of these directors
e t.1Nr
are to hold office for three years. Three
Of these directors are TO be chosen by
and are to be representative of the stock
holding banks; three shall be fairly rep
resentative of the commercial, agricul-
tural and Industrial interests of the dis
trict" and three members shall be desig
mated by the Federal reserve board.
May Remove Directors.
II it should appear at any time that
director does not fairly represent the
commercial, agricultural, or industrial in
terests of his district he may be re-
moved by the Federal reserve board.
The three directors of the Federal re-
serve hank, representing the stockhold-
ing bank. and the three representing the
agricultural. commercial, and industrial
interests of the district, are to have
their terms expire first in one, two, and
three-year periods; but thereafter every
director Of a Federal reserve bank is to
hold office for three years.
The chairman of the board of directors
of each Federal reserve bank VIII be
removable at the pleasure OF the Fed
eral reserve board without notice.
Under section the earnings of each
Federal reserve bank are disposed of as
follows:
When holders shall have received the
dividends at the rate of per centum
per annum, herein provided for, all ex-
cess earnings shall be paid to the United
States"
Section s of the bill provides that
any national banking association
heretofore organized may, within one
wear from the passage of the act and
with the approval of the currency, be
granted all the rights and be subject
10 all the liabilities of national bank
ing associations organized subsequent
to the passage of the act. Any nation
al banking association falling to or
ganiZe under the act within one year
after its passage will be dissolved.
Any bank or banking association in
corporated' by any State having unim-
paired capital sufficient to entitle it TO
become a national banking association
under the provision of the act may
become a national banking assocIa-
ton.
The Federal Board.
The makeup of the important Federal
reserve board is provided in Section of
the bill II is to consist of nine MEM
bers, including the Secretary Of the Treas
ury, the Secretary of Agriculture. and
the Comptroller of the Currency, who
shall be members ex officio. Three mem
bers are to be chosen by the President of
the United States, by and with the con-
sent of the Senate, for a term of six
years each. and three members are to
be chosen by electors of the Federal re-
serve banks. OF the three members of
the Federal reserve board. appointed by