The chronicle=news., 1913-06-20
ountry banks under carefully guard

ed conditions.
Provision Will be made for close
oversight of national institutions
with view to holding them strictly
UP TO the requirements Of q legitim-
ate banking business.
In order to possess themselves of
the kind Of paper emitting them to
re.discourts. national banks will
find themselves obliged to keep .
reasonable proportion OF their assets
In the form Of paper eligible for re-
discounting.
at Is believed that the present
sub-treasury. system is unsatisfac-
tory. clumsy. Injurious to business
and difficult 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
ment creditors by check thereon.
THE equalization of the public
funds between the different reserve
banks by direction OF the Secretary
Of the Treasury aud subject TO =
federal reserve OF the board.
THE trust funds OF the treasury
are to be held ax at present In the
vaults of the treasury.
"Under the termx OF the bill. the
federal reserve banks. after the pay
ment OF all expenses and taxes. are
entitled to pay an annual cumulative
dividend Of five per cent on paid In
capital to their stockholdinx men,
bers. One half the net earnings Of
the bank must be paid Into the sur
plus fund until said fund shall
amount to 20 per cent Of the paid In
capital OF the bank. The remaining
one half Of the hank earnings shall
be paid to the United States and
whenever and 30 long ns the surplus
fund Of each federal rcscrv" bank
amounts to 20 per cent Of the paid
In capital. the share holders having
five per cent all excess carninxs shall
be paid to the United States. Every
federal rcscrve bank is cxcn.pt from
federal. state aud local taxation. cS-
ccpt In respect to taxes upon real cs-
tate
Til. terms of office of the four
members OF the federal reserve board
appointed by the president arc To be-
eight years with the provision that
those first appointc will serve :. =.
6 aud years respectively.
The salary OF each member except.
Ing the cabinet members will be-
| $4,000 n year and the comptroller
Of the currency would rceciv" $500"
In addition to the $4,000 salary he
now receives.
"rhc chief points In tho nc~ fed.
eral reserve banks arc described as
follows:
1.-THE number Il to be -. with
possible iner~as~ later ~ provided.
The ownership IL to bc in the
hands Of the ssockholdinR banks o.
tn. =: districts In which the rcscrS.
hanks are situated. The national
tanks are eomp-iird to be me mbcrs
and state banks and sr,is, eompan-
les are permitted to be members.
The capitalization 10 TO b~ 20 pc.
cent Of the stoskhalainr banks. on.
half paid In and ono half snbjce, to
call.
The business Of these federal re-
serve hanks is To be AZ follows:
"Rcdiscouniinx Of paper present.
I'd BY s'oeshoidinx banks under
specified conditions. provided such
paper grows ou, Of actual ax.icnii-
urai. commercial or Industrial trans
actions and does not run more than
specified number Of days.
The buyi aud selling Of govern
mont securities. gold and silver bull
lion and foreign coin. foreign cx-
change. and open market bills O! civ
IN maturity.
"Govcrnmcn, fiscal operations.
In order to meet liis vicw so Oft
on expressed In cosumcrciai circle. to
the effect that the prosecution OF
American busiacss in foreign roun-
tries would he greatly helped by i'm
proved banking facilities. the bill
authorizes any national banking as
sociat I'm with = minimum capital of
81 900. 900 to establish branches In
foreign countries for the furthcrancc
Of foreign commerce OF the United
States and TO act - fiscal asrW,s oi
the United States abroad. The 1Sl.