The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1913-12-23

for new banking system that Is
supplementary TO the commercial
banks OF the country. the law pro.
vidcs for gradual transfer of part
OF the bank reserves to the new
Reservoir banks. In order not to
disturb business conditions or TO
withdraw too suddenly tho heavy
deposits of country banks In the
largo cities. the law provides that
three years may be consumed IN
shifting these balances and that If
necessary part of the reserves trans
ferred to the regional banks may
consist of commercial paper
The amount OF reserve required
from every bank under the new law
and the place where IL must be kept
are as follows:
Country banks-Total reserve re-
quired. Il per cent Of demand de-
positS and per cent of time de-
posits. FIve-twelfths must be kept
and four-twelfths after that time.
For the first year. two-twelfths must
be kept in the regional bank, incress-
lns one-twelfth each six months
thereafter until !t reaches five
twelfths of the total reserve For
three years the unallotted part of the
reserve may be kept in the banks of
reserve cities: after that time IL must
he kept either In the country banks
vaults or in the regional reserve bank.
Reserves Required.
Reserve city ba nks-Toial reserve
required, l5 per cent Of demand and
per cent OF time deposits. SIx"Hf-
teenths must be kept In the banks
vaults for the first two years and
fve-iiftecntbs after that time. Three
flfteenths must be kept in the re-
gional reserve bank for the first year,
increasing one-flfteenth every six
months thereafter until 1t reaches
-ilfteenths, For three years the
unallotted portion OF the reserve may
be kept In other banks. In It's own
vaults or IN the regional banks: aft
er that time in one OF the latter
places.
Central reserve city banks New
York. Chicago and st, Louis)-Total
reserve required, Is per cent OF de-
mand and 5 per cent of time deposits,
Six -eighteenths must be kept In the
banks own vaults, seven -elghteenths
In the regional reserve bank and the
remaining five -cighteenths In either
place the bank may choose,
Board of Directors.
These immense funds OF reserves
from member banks together with
government moneys, will make UP
the deposits OF the regional reserve
banks. Each of these banks will be
administered BY board Of nine di-
rectors. SIX OF whom VIII be, elected
by the banks and three appointed by
the federal reserve board.
The regional banks may reds
count-that Is, buy at discount from
Its member banks-"prime CONNER
cial paper" when the member banks
desire to convert these assets into
money The exact terms of this Inn
portant provision as to the charac-
ter of paper upon which the regional
reserve banks may furnish cash are
as follows:
Upon the Endorsement of any OF
its member banks with a waiver of
demand notice and protest by such
bank any federal (TesionaD reserve
bank may discount notes. drafts and
btlls OF exchange arising out OF ac-
tual commercial transa ctions: that
is. notes. drafts and bills OF eX-
change issued or drawn from agri-
cultural. Industrial or commercial
purposes or the proceeds of which
have been used or are to be used for
such purposes, the federal reserve
board TO have the right to determine
or define the character OF the paper
thus eligible for discount within the
meaning of this act.
Eligible for Discount.
Nothing in this act contained snail
be construed TO prohibit such notes.
drafts or bills of eXchan nge 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 merely
investments or issued or drawn for
the purpose of carving or trading in