Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1913-06-20

cent 10 hf htlNi . H'l tthA III NV
banks vaults. per cent with the na-
tional reserve banks and per cent
either at home or with the reserve
banks. while reserve and central re-
serve city banks have reserves of 20
per cent on demand liabilities of
which 10 per cent viii be az home, ,
per cent with the reserve bank of the
district and per cent either at home
or with the reserve bank. the state
ment says
THE presumed effect Of this plan
viii be to end the placing of reserves
with central reserve city banks, for
use in stock market operations, to
keep reserves in some measure at
home. and 10 require spectators To
get the funds they need in their OPP
erations either hy directly borrowing
them from persons who hold them
ard want lend th cash for that
purpose. or else by borrowing from
the banks IN the places where the
operations are to he carried on.
"The bin is based ON the belief that
no one should participate IN the con-
troll of the financial system unless he
IS financially Interested himself or
chosen rs those who are, except inso-
far as the government steps IN ana
asserts the authority of the whole
community. with this in mind. the
system has been devised SO as to pro-
vide for the continuation of existing
national banks with their organiza-
I tion powers and functions unchanged.
In addition there is esta blshed sys-
tenn OF federal reserve banks, which
are Incorporated institutions holding
| federal charters and IN all respects
managed like national banks. except
as TO the election of directors.
each Of the federal reserve banks
would be managed by board OF nlne
| directors. three of whom would be
| bankers selected by the banks, three
will be members selected in the same
way but required to represent the
commercial. Industrial or agricutur-
al interests of the district, and subject
to removal by the federal reserve
board in case they do not fairly rep
resent these interests. The remaining
three directors are to be chosen by
the federal reserve board.
"The object of the bill is to effect
a moderate division and classification
of banking business along Indicated
lines. the net result presumably be-
ing summed up as follows
"Nauonal reserve banks will be
/ limited to re-discountlng actual com
mercial and industrial transactions
evidenced bv very short term paper
and ON rare occasions under careful
IL prescribed conditions to financial
operations protected by collateral
They will also he able to engage IN
foreign exchange operations, sales Of
government securities. etc.
National banks viii he subjected
to the same restrictions as at present
with relaxation in favor Of mode
rate amount of real estate loans by
country banks under carefully guard
cd conditions.
provision viii be made for close
oversight of national institutions with
a view to holding them strictly up 10
the requirements of legitimate bank
ing business.
"ln order to possess themselves ol
the kind Of paper emitting them to
rediscounls, national banks VIII flnd
themselves obliged to Keep a reason
able proportion of their assets IN IN.
form of paper eligible for re-dis-
counting.
1T is believed that the present SUD
treasury system is unsatisfactory
clumsy. injurious to business ana
difficult to manage in times Of stress
The bill therefore provides for'
The placing Of all current funds oil
the treasury in federal reserve banks
and the payment of government cred
itors By check thereon.
gThe equalization of the pubic
funds between the different reserve
banks bv direction of the secretary OF
the treasury and subject to a rate OF
interest to Be fixed by the federal re-
serve board.
"The trust funds of the treasury
are to be held as at present In the
vaults Of the treasury
Under the terms of the bill ;hC
federal reserve banks, after the pay
ment Of all expenses and taxes, are
entitled to pay an annual cumulative
E dividend Of per cent on paid In cap