The Fairmont West Virginian. (Fairmont, W. Va.) 1904-1914, 1913-12-23

owl EIle STOCK Oh Tue OBSERVATION-DISCLOSURES.
i5a1k OF their district. Each mem
Eber-bank will be required to take
capital stock Of the regional reserve
bank equal to 6 per cent Of the mem
rber-banks's capital and surplus. The
capital Of the regional bank will in
crease or decrease so that 1t always
represents 6 per cent. of the COM
Oined capital and surplus Of all the
banks OF the district that have jotn-
cd the system.
Compelled to Join.
| National banks are compelled to
join, and state banks are permitted
o If they bring their reserve re.
qulrements up to the standard sci
for national banks and submit to na,
t!Onal examinations.
Public ownership of the stock o.
the regional reserve banks is permit
ted only in case enough banks do no
Join in any district to provide cap
ital stock of s4.OO0,00O Ip suci
event the public may purchase the
stock in quantities limited to $255
900 for each individual; but the yOt
ing Of this stock will be placed in TIN
hands of government representative:
or the board Of directors OF the re-
giOnal reserve bans.
The regional reserve banks may
do business only with their member.
banks. not with the public, except
that certain "open-markct opera.
tlons." such as The purchase and salG
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 memberships, and
frCm the purchase and sale Of bonds
and foreign bills OF exchange. i
Dividends and Net Earnings.
Member-banks will be compelled
to put up in cash only one-haif OF
their subscription to the capital "a
the new banks; the rest can be called
for if needed by Ale regional bank.
Dividends Of per cent. will be paid
on this stock to the member-banks,
and the stock will be non-taxable.
After these dividends are paid, one
half Of the surplus net earnings goes
! to create regional surplus fund, AMI
when this has reached 40 per cent. OF
the regional banks paid-in capital,
these earnings are to go into the Uni
ted States treasury. The balance OF
the net earnings are to be paid to
tile United States as franchise tax.
with the machinery thus created
for a new banking system that is sup
Elementary to the commercial banks
OF the country, the law provides to'
a gradual transfer of part OF the
bank reserves to these new "reser-
yOir" banks. In order not to disturb
buyiness conditions, or to withdraw
TOO suddenly the heavy deposits o.
the country banks in the large cit
les the law provides that three years
may be consumed in shifting these
balances, adm that, if necessary, part
Of the reserves transferred to the re-
glonal banks may consist Of CONNER
cial paper.
The amount Of reserve requires
from every bank under the new law
and the place where it must be kept,
are as follows:
Bank Reserves Required
County banks: Total reserve le
1 mired, u per cent. OF demand dc
posits and five per cent. OF time dc
pCsits. Five-twellths must be KEPT
in the banks vaults for two year.
and four-twelfths after that time
For the first year, two-twelfths mus
be kept in the regional banks. in
crasing one-twelfth each six months
thereafter until it reaches five
twclfths of the total reserve. Fo
three years the unalloted part OF tn
reserves may be kept in the hunks o
reserve cities; after that time 1t mus
be kept either In the country bank
vaults, or in the regional reser7
banks.
, Reserve city banks: Total rcserv
required. ! ) per cent. Of demand an
five per cent Of time deposits. Six
rifteenths must be kept in the 1ank'
vaults for the first two years, AM
-rirteenths after that time. IlGa
lltccnths must BIZ kept in the re
giOnal reserve bank for the first year
, increasing onc-fftecnth every si'
months thereafter until 1t reache
ix-fiftecnths. For three years tn
unallotted portion of the reserve ma,
be kept in other banks in It's owl
vaults or IN the regional bank: ate
that time in one OF the latter tw'
: places.
Central reserve city banks (Nev
York, Chicago, st. Louis: Total re
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