Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1913-07-01


trol of he system unless he is finan-
cihlly interested himself, or chosen
by those who are, except insofar AS
the government steps In ana asserts
the authority of the whole communi-
iy With thls In mind, the system has
been devised so as TO provide for the
continuation Of existing national
banks with their organization, pow
ers and function unchanged. In ad-
dition, there Is established "A system OF
federal reserve banks which are in
corporated Institutions holding feder-
al securities. In all respects managed
Ike national banks, except as 10 the
election Of directors
There are ~ Of these federal re-
serve banks, each managed by a
board of nine directors. three Of
whom will be expert bankers selected
10y the banks, three will be members
selected in the same way but required
to represent the commercial, indus
trial or agricultural interests of the
district and subject 10 removal by the
/ federal reserve board in case they do
not fairly represent the people. The
remaining three directors are to be
chosen by the federal reserve board.
The object Of the bill is to effect
moderate division and classification
of banking business along indicated
lines, the net results presumably be-
ing summed up as follows:
National reserve banks will be
strictly limited to re -dscounting ac-
tual commercial and Industrial trans
~ tons evidenced 10y very short term
paper and, on rare occasions, under
carefully prescribed conditions, to
financial operations protected by coll
lateral. They will also be able to
engage in foreign exchange operations
I etc.
National banks will be subjected
to precisely the same restrictions as
( at present with relaxation In favor
of moderate amount OF real estate
loans by country banks under care
! fully guarded conditions.
Strict Supervision.
by revision OF the administra-
]
act. provision will be made for close
oversight Of national institutions with
view to holding them strictly up to
| the requirements of legitimate
banking business.
In order to possess themselves Of
/ the kind Of paper emitting them to
discounts. national banks will find
themselves obliged to keep reason
able proportion of their assets in the
form Of paper eligible for rediscomt-
! ing.
1T is believed that the present sub
| treasury system is unsatisfactory.
/ clumsy, injurious to business and diff
ficult To manage in times Of stress.
/ The bill, therefore, provides for:
The placing of all current funds
of the treasury in federal reserve
banks and the payment of govern
mcnt creditors by check thereon.
The equalization OF the public
funds between the different reserve
hanks by direction OF the secretary OF
the treasury md subject to "A rate OF
Interest to he fixed by the federal re-
serve board.
"The trust funds Of the treasury
are to be held as at present in the
vaults Of the treasury
May Pay Dividends.
Under the terms of the bill. tho
federal reserve banks, after the pay
m,nt ~ all expenses and taxes. are
er titled to pay an annual cumulative
dividend of five per cent on paid in
capital to It's stockholding members.
one half the ent earnings of the
bank must be paid in to the surplus
fund until said fund shall amount to
&c per cent II the paid in capital Of
the bank The remaining one half Of
the banks earnings shall be paid to
Ia. United States and whenever. and
SO lond as. the surplus fund Of each
, federal reserve bank amounts to 20
per cent of the paid in capital. the
share holders having received their
permissible dividend of five per cent,
all excess earnings shall be paid to
the United states. Every federal re-
serve bank is exempt from federal.
state and local taxation. except In
respect to taxes upon real estate"
Serve Eight Years.
The term of office Of the four mem
b,rs of the federal reserve board APP
,inted by the President are to be
o!rht years. with the provision that
those first appointed will serve two,
four. six and eight years respectively.
Up to the last few days. the feder-
al reserve board was 10 have consist
ed of nine members instead Of seven.
and the banks were to be permitted TO
select three Of these.
Thus II will be noted" says Mr..
Grimes statement the government
will have absolute control Of the sys-
tenn.
THE salary OF each member ex-
cepting the cabinet members. will be
SO goo year. and the comptroller
Of the currency would receive 5000 !
IN addition to the $1,000 salary he
new receives.
The chief points in the new fed
eral reserve bank are described as
follows:
THE number is to be twelve. with