The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1913-12-25
I.scouni. within the meaning OF this

discount. within the meaning of this
act.
Nothing III this act contained
shall be construed TO prohibit notes,
drafts and bills OF exchange. secured
by staple agricultural products. or
other goods, wares or merchandise
from being eligible for such discount:
but such definition shall not include
notes, drafts or bills covering mercy
investments or issued or drawn fol
the purpose OF carrying on trading
in stocks, bonds or other Investments
securities, except bonds and notes Of
the government of the United States.
Notes, drafts and bills admitted
to discount under the terms OF this
paragraph must have a maturity al
the time OF discount OF not more than
ninety days; Provided, that notes,
drafts and bills drawn or issued TOR
agricultural purposes or based on live
stock and having a maturity not ex-
ceeding six months may be discounted
IN an amour to be limited to ID per
centage of the capital of the federal
(regional) reserve bank, to be ascer-
tanned and fixed by the federal re
serve bank.
The New Notes.
The new treasury notes, which are
TO furnish the elastic element in
the currency system, and to add to
the country's circulating money in
time OF need, viii come into use iii
the following way:
The notes Will be printed by the
| pnV prpIt 1aht wifi, n Afcttnarfrn ctNla
for each regional reserve bank. one
of the three directors named by the
Federal reserve board for each reg
ional bank will be known as the fed
eral reserve agent for that bani,
and a supply OF the notes viii be plac-
ed in his custody.
Should a regional bank desire tC
pay out more money than its cash
resources Will permit, the law pro
vides that it may put some OF its re
discounted commercial paper into thr
hands of federal reserve agents.
and receive in return the new treas
ury notes. For each note that it puts
into circulation, the regional reserve
bank must set aside in gold forty
per cent OF the value of the note, as
a guarantee for its redemption. This
gold, with the commercial paper he'll
by the federal reserve agent is The
protection behind the new money ,
but these notes will also be guaran-
teed by the government, and may b.
redeemed in gold at the United State
treasury.
Regional Bank Reserves.
Each regional bank, under the act
I n1nSt Eapn 81 YGsprNa nj thjtf T-lN 90
per cen OF the deposits ii has receiy-
ed, beside the forty per cent gold re
serve behind the treasury notes il
issues. II the gold reserve behind The
notes fan below forty per cent, I
heavy tax is imposed on the bank
which in turn adds The tax to til,
rate it charges member-banks fol
cedfscounts. This was designated Il
stop an over-eXpansion OF currency
In times of sudden stress, the fedora
reserve board can suspend these re
serve provisions, in order to turnis!
quick relief to any community.
One regional bank cannot agaii
pay out the notes OF another. eNcept
under a neavy taN. These notes are
expected to return TO the regiona.
oanks and be Withdrawn from cir
sulation when the need for their use
passes.
None Of the existing forms oil cur
rcncy except the national bank notes
Will be disturbed by the new law, The
United States bonds. 10Y used to ST.
cure the issue of national bank notes
are to be taken up at the rate OF
$4,000, 600 a year by the regioua
reserve banks and new treasury not
es or short term three per centbone,
will take their places, National banks
currency is expected gradually to re
ire.
The federal reserve board will eX
ercise final control over the entire CD
, GRAFTON of the system. 1t can compe.
one regional bank to loan to another
in time of need; can suspend all re
strictions surrounding the reserves
which regional banks must hold; car
remove directors OF regional reserve
banks whenever it is believed neceS-
, sary.
While the banks retain control o.
the boards of the regional reserve
banks, their connection with the fed
eral reserve board is only through
an advisory council. made up OF one
representative from each federal re,
serve district. This council Will meet
in Washington to confer with the
federal reserve board ION general
business conditions" and to make re.
Communications and suggestions CON
corning discount rates, note issles
and reserve conditions.
An important change in national
banking methods. embraced in tn,
new law, viii permit all national
banks except those iii New York, Chi
eago and St. Louis, to make direct
loans on five-year farm mortgages,
up to twenty-five per cen of then
capital and surplus, or up to one
third of their time deposits. Another
provision in the law permits national
banks having a capital of $1,090,0 0u
or more to open foreign branches.
Similar authority is given to the re-
gional reserve banks, the purpose be
ing to facilitate the development OF
American trade abroad.
BLINDNESS CAUSE OF
CIUCIDE AT NEWARK