The Barre daily times. (Barre, Vt.) 1897-1959, 1913-12-24
pINK K, I,

provided for, to come out in case OF
emergency, and which is expected to go
| back into the hands of the government
when times are normal. These treas
ury notes" will be printed by the gov
eminent, and issued through each region
al reserve bank, and win bear the guar
antee both of the regional bank and the
government.
If the demand for currency in any sec
| tion of the country exceeds the supply
of circulating money, a regional bank
can secure this new money from the
government and put it into circulation;
but a gold reserve of 40 per cent, and
commercial paper equal to the full value
of the note, must be held as reserve
behind each note so issued. This provi-
sion is expected to be the influence that
will drive the new money back into re-
tirement when it is no longer needed.
Federal Reserve Board in Charge.
The following analysis presents the
details of the new law without adher-
ing closely to the technical division or
language of the measure.
At the head of the system will stand
federal reserve board at Washington,
appointed by the president, and to con-
sist of the secretary of the treasury,
the comptroller of the currency and five
other members. Two of these shall be
expert bankers, but none shall have
banking affiliations or own bank stock
during their service. This board will ex-
ercise general control over the entire
system.
The temporary Organization commit
tee" or the federal reserve board, will
select from eight to IL cities where re-
gional reserve banks shall be located,
and will divide the entire country geo
graphically with these cities as the CEN
tiers of districts All national banks in
a district will be required to subscribe
for the stock of the regional reserve
bank in that district, and to keep a por-
ton of their reserves there.
Local banks will be known az "member
banks" because they viii own the stock
of the regional reserve bank of their dis
trict. Each member bank will be re-
CURED to take capital stock of the re-
gional reserve bank, equal to six per
cent of the member banks capital and
surplus. The capital of the regional
bank will increase or decrease so that
it always represents six per cent. of the
combined capital and surplus of all the
banks of the district that have joined
the system
All National Banks Must Join.
National banks are compelled to join,
and state banks are permitted to if they
bring their reserve requirements up to
the standard set for national banks, and
submit to national examinations.
Public ownership of the stock of the
regional reserve banks is permitted only
in case enough banks do not Join in any
district to provide capital stock of
"a 100000. In such event the public may
purchase the stock in quantities limited
to $4,000 for each individual; but the
voting of this stock win be placed in
the hands of government representatives
on the board of directors of the regional
reserve bank.
The regional reserve banks may do
business only with their member banks,
not with the public, except that certain
open market operation" such as the
purchase and sale of gold, government
or municipal bonds, and certain forms
of bills of exchange, are permitted.
These banks will make their earnings
from the loans made to member banks, |
and from the purchase and sale of bonds
and foreign bills of exchange.
Member banks will be compelled TO
put up in cash only one-half of their
to the capital of the new