The Topeka state journal., 1913-12-23

@snt ne sssasss ..esgs P%sSss % .es s.,s eet'' q
count under; the terms Of this pafAxraYn
mnst nn. have maturity q 8 The n time OF dis-
CoHmercial Paper.
..Provided that notes, drafts and bille
or based ON Nye stock. and having q
1s nss e se a%sosnt e
to Percsntaee Of the sapitsin = Of the 80 csc-
board" The rexional hanks may also
discount "acceptances based ON the Inn
portation o. expectation shipments OF
sThe United Btates bonds now used to
secure the i.sue Of 1asicn ste os os9n ss es coo
a year by the regional reserve banke and
new treasury notes. or abort term Per
tional bank currency il expected gradual
ly to retire.
f.s The nss * nStss element shss Il Il. ere =
circulating money in tims Of need, Will
notes noees Wiz Wiz be Ss pesstsd @ ' Sy the government
withAa distinctive style Tor each re9lonal
reserve bank. One Of the three directors
''the federal reserve agent for that bank
and q supply Of the notes VIII be placed
Should q regional bank desire to pay ont
more money, than its cash resources VIII VII.
permit. the law provides that It may put
per into the hands Of the federal reserve
IN note i puts
circulation the regional reserve bank must
set aside in gold 10 per cent Of the value
| ton. This gold. with the commercial
paper held by the federal reserve agent y
these notes viii also be guaranteed by the
at the United States treasury. Each
reserve Of S per cent Of the deposits It
has received besides the % per cent gold
reserve behind the treasury notes 1t is-
Gold Reserve.
If tho gold reserve behind the notes falls
below 20 per cent heavy tax is imposed
the rate it charges member banks for re-
discounts. This was designed to stop an
e. e In
order ord pu to furnish s QUICK reiief to any conn m
pay out the notes Of another except under
! heavy tax. These notes are expected to
return to the regional banks and be with
their use passes. Mono of the existing
forms Of paper currency Win be dis
made. however, that the government 2
per cent bonds upon which national banks
now secure the issue of their bank
4
ment at par through the regional banks.
This provision IL expected to result in the
gradual retirement Of most of the national
bank currency.
The federal reserve board will exercise
final control over the entire operation of
! the system It can compel one regional
| bank to loan to another In time of need;
can suspend all restrictions surrounding
the reserves which regional banks must
hold: and can remove directors OF regional
reserve banks whenever 1t is believed
necessary. While the banks retain control
| of the boards Of the regional reserve
banks their connection with the federal
reserve board Il only through an advisory
council made up Of one representative
from each fedefal reserve district This
council will meet In Washington to confer
with the federal reserve board ON gen.
eral bueiness conditions and to make rec
concentrations and suggestions concernine
discount rates. 1Qte issues and reserve
a AN important change in banking meth
DDS embraced in the new law will permit
all national banks, except those IN New
York, Chicag9.e4 St. Louis to make d.
4 up to 3 per c3df 36{ their capital ana sur
plus or up to one-third Of their deposits
Another provision IN the law permits ma
tfonal banks having q capital Of 81 900. .00(
or more. to open nff0relgn branches Sim
liar authority II Given to the regional re-
! serve banks. thes purpose being to facili-
tate the Development Of American trade
abroad. s,f.r