The Washington herald., 1913-06-20

Y HERALD. FRIDAY.
United States. and such reduction shall
be accompanied by q corresponding re-
duction in the reserve of lawful money
set apart for the redemption OF said
notes and by the release Of correspond
ing amount of the collateral security de-
posted with the local Federal reserve
agent
May withdraw Collateral.
"Any Federal reserve bank may at its
discretion withdraw collateral deposited
with the local Federal reserve agent for
the protection of Federal reserve Treas
ury notes deposited with IL and shall at
the same time substitute other collat-
eral of equal value approved by the
Federal reserve agent under regulations
to be prescribed by the Federal reserve
board.
1T shall be the duty of every Federal
reserve bank to receive on deposit. at par
and without charge for exchange or col
lection, checks and drafts drawn by any
Of its depositors upon any other depos-
itor. and checks and drafts drawn by
any depositor in any other Federal re-
serve bank upon funds to the credit of
said depositor in said reserve bank last
mentioned. The Federal reserve board
shall make and promulgate from time to
time regulations governing the transfer
Of funds at par among Federal reserve
banks. and may at its discretion exercise
the functions Of a clearing house for
such Federal reserve banks. and may
also require each such bank to exercise
the functions Of clearing house for Its
banks"
"(d) To suspend for a period not ex-
ceeding thirty days land to renew such
suspension for periods not to exceed If
teen days. any and every reserve require
ment specified in this act.
"(e) To supervise and regulate the issue
Of Treasury notes to Federal reserve
banks.
20 To add to the number Of cities
classified as reserve and central reserve
cities under existing law in which ma
tional banking associations are subject to
the reserve requirements set forth In the
act; or to reclassify existing reserve and
central reserve cities and to designate the
banks therein situated as country banks
at its discretion.
"(g) To require the removal of officials
Of Federal reserve banks for incompe-
tency. dereliction of duty. fraud. or de-
ceit.
''(h) To require the writing OF Of doubt
full or worthless assets upon the books
and balance sheets of Federal reserve
banks.
I'D To suspend the further operations
Of any Federal reserve bank and appoint
a receiver therefor.
I'd To perform the duties. functions, or
services specified or implied in the act.
Expert Bankers on Board.
THE bill is based on the belief that
no one should participate In the control
Of the system unless he is financially
Interested himself. or chosen by those
who are, except in SO far as the gov
steps In and asserts the author
lty OF the whole community. With this
In mind. the system has been devised
80 as to provide for the continuation
Of existing national banks with their
powers. and functions I'M
changed. In addition, there is estab-
ished a system of Federal reserve banks,
which are Incorporated institutions hold
ing Federal charters. and IN all re-
'pects managed like national banks, ex-
,ept as to the election OF directors.
- eeehSAs arc t"clNt tneSt
Federal reserve banks. each managed by
| board Of nine directors. three Of whom
VIII be expert bankers selected by the
ranks: three will be members selected
n the same way, but required to repre-
lent the commercial, Industrial, or agri-
cultural interests Of the district, and
subject to removal by the Federal re-
'erve board in case they do not fairly
epresent these interests. The remain
ng three directors are to be chosen by
he Federal reserve board, and one Of
hem Is to be designated by said board
IS chairman Of the board Of directors
II the Federal reserve bank Of the dis
riot to which he is appointed, and is
o be the agent OF the Federal reserve
'oard.
The national banks are compelled to
'e stockholding members of the Federal
eserve bank OF their respective districts,
nd State banks and trust companies are
'ermitted to be members under cert.in
yell defined regulations. All the domes-
ic transactions of the Federal reserve
'ank must be with member banks and
he government. except that IL may pur-
hase bankers bills and bills of ex-
hange in the open market from indI-
iduals, as well as from domestic or
oreign banks
THE object of the bill is to effect a
Moderate division and classification of
anking business along indicated lines,
he net result, presumably, being
ummed up as follows:
Eject of Measure.
"CD. National reserve banks will he
trictly limited to rediscounting actual
and industrial transactions
by very short term paper and
n rate occasion, under carefully pre-
cribed conditions. to financial operations
rejected by collateral. They will also
e able to engage in foreign exchange |
perations, sales of government securi- |
les. &c. as already explained.
CO. National banks will be subjected |
D precisely the same restrictions as at /
resent with a relaxation in favor of a |
loderate amount Of real estate loans
y country banks under carefully guard |
! conditions.
90. By revision OF the administra-
We features of the national banking act
revision will be made for close over
ght of national institutions with a view
holding them strictly up to the re.
nirements Of legitimate banking bust
ess.
20. In order to possess themselves of
lie kind Of paper emitting them to re-
national banks will find them
lives obliged to keep a reasonable pro-
ortion Of their assets in the form of |
aper eligible for rediscounting, and this
i'll mean very considerable emphasis
pom the strictly commercial aspects of
lie business done by national institu-
ms"
OHicinl Digest of BtII.