The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-12-30

| "A%A~AA 40 NSSAS4ASN ~ NC
effective Is put upon the national
banks to enroll in the new organiza-
ton. This coercion is expressed both
by direct mandatory provision and by
the arrangement for enabling national
banks to get rid OF the United States
bonds which they have had to pur-
| chase in the past in order to obtain
national charters. The retirement Of
circulating notes dealt with in section
IS Of the new law Is facilitated only
for national banks which become
members. The mandatory require
ments are contained in section 2 Of
the act.
According to these requirements
every national bank must Signify in
writing, within sixty days after the
passage Of this act, its acceptance Of
the terms and provisions hereof New
ertheless, this short shrift seems to af-
feet only banks in reserve and central
reserve cities. Any national bank
which fails within one year after the
passage Of this act to become a mem
Der bank shall forfeit its charter.
Apparently every country bank can
avail itself of the one-year limit to
reach a decision about joining the new
association.
The only penalty which seems to
be set up, either for falling to signify
acceptance of the terms Of the act un-
der the sixty-day clause or to sub
scribe to the capital stock Of a feder-
al reserve bank within thirty days
after notice from the organization
committee that the federal reserve
bal nix cities have been designated and
the geographical limits of the federal
reserve districts have been fixed. hits
banks in the present reserve cities.
Such banks, failing to accept the
terms Of the act within sixty days aft
err its passage, shall cease to act as
reserve agents upon thirty days no.
tice, to be given within the discretion
of the organization committee or Of
the federal reserve board.
Changes in reserve requirements
made by the act do not qualify the
foregoing conclusion. These changes
apply only to every subscribing men,
Der bank
IF there should be any general
exercise by country banks Of the
privilege OF waiting 8, year before
joining the new system it might
hamper somewhat the establishment
of at least some of the federal reserve
banks. Country bank con-
stitute more than half Of the resources
Of the national banking system, and
the country bank capital and surplus
is about 55 per cen Of the aggre-
gate.
Nevertheless, most attention will
fasten Immediately on the course pur-
sued by the national banks in reserve
and central reserve cities. The pro-
liabilities are that after the annual
meetings OF these banks. which will
be held in January, clearer indica-
lions Of purpose will be afforded, but
it would not be surprising if following |
the first early declaration Of intention |
banks some delay should ensue in
signifying attitudes.
Examination of the act indicates |
that 1t will be easier for banks to get
out Of the federal reserve association !
later than to stay out now. Com |
pulsion, legal or otherwise, will oper-
ate to recruit the membership Of the
new organization, but disappointment
should not be felt if, after the initial
Impulse. the process Of applying for
membership should be somewhat re-
tarded. Banking traditions are con-
ducive to coo consideration rather
than to action on implse, and bank
officers and directors will want time |
to study the new law in consultation
with their counsel and stockholders, |
familiar as they may be with it's pro-
visions while in the evolutionary |
stages of legislation.
Moreover, the sixty day limit will
probably suffice for President Wilson |
to select candidates for the federal
reserve board and submit his nomina-
lions to the senate. 1t is reasonable
to suppose that many banks will be
influenced by the complexion Of the
board as shown in the presidential ap-
p~ointments. Undoubtedly this is All
argument for expecting that the APP
pointments will make a universal ap-
peal to the confidence of the business
and banking community, but it is
equally indubitable that a considerable
percentage Of the banks would like
to know in what hands the tremend-
Gus powers Of the central body of con-
troll over the federal system will be
placed"