The midland journal. (Rising Sun, Md.) 1885-1947, 1913-06-27

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which country banks will have Is per
cent. Of reserve e. e., 15 per cent. Of
total demand iiabilities], such is per
cent. to be held S per cent. in the
banks vaults, 5 per cent. with the ma
tional bank reserve and s. per cent.
either at home or with the reserve
bank, while reserve and central re
serve city banks have reserves of 20
per cent. of demand liabilities, of
which 10 per cent will be at home, s.
per cent with the reserve bank Of the
district and 5 per cent. either at home
or with the reserve bank"
'sThe presumed effect Of this plan
will 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
to require spectators to get the funds
| they need in their operations either
by directly borrowing them from per-
sons who hold them and want to lend
the cash for that purpose or else by
borrowing from the banks In the
places where the operations are to be
carried on
I'm the belief that the present re-
serve system is antiQuated and I'M
satisfactory; that to the massing Of
funds In New York and other financial
centers, Of which so much has been
said In recent years, Is largely due to
the present reserve requirements Of
national banks, and that in order to
get the real benefit from the system
OF rediscount which has been proposed
as remedy for many existing evils it
is necessary to base such system upon
an actual control Of reserves, provision
has been made for recasting the pres
ent bank reserve system.
Members OF Board.
The terms of Office. Of the four mem
bers Of the federal reserve board ap-
pointed by the President are to be
eight years, with the provision that
those first appointed will serve two.
four, six and eight years, respectively.
Up to the last few days the federal
reserve board was to have consisted OF
nine members instead of seven and
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select three OF those.
"This 1t will be noted, says Mr..
Class statement, "the government will
have absolute control of the system.
"The salary of each member, ex-
cepting the cabinet members, will be
$4,000 a year and the comptroller OF
the currency would receive $4,000 in
addition to the $4,000 salary he now
receives.
'The chief points in the new federal
reserve bank are described as follows:
"The number is to be IL, with pos
sible increase later, as provided.
"The ownership is to be in the hands
of the stockholding banks of the IL
districts in which the reserve banks
are situated The national banks are
compelled to be members and state
banks and trust companies are permit
ted to be members.
AS To capitalization.
.aThe capitalization is to be 20 per
i, cent. of the capital Of stockholding
banks, one-half paid in and one-half
subject to call.
"The business of these federal re-
serve banks is to be as follows:
"Rediscounting OF paper presented
by stockholding banks under specified
conditions, provided such paper grows
out OF Sctual agricultural, commercial
or industrial transactions, and does not
run more than specified number of
days.
Buying and selling government
securities, gold and silver bullion and
foreign coin, foreign exchange and
open-market bills of given maturity.
Government fiscal operations.
'In order to meet the view SO often
expressed in commercial circles to the
effect that the prosecution Of Ameri-
can business in foreign countries
would be greatly helped by improved
banking facilities" Mr.. Glass state
ment continued, 'the bill authorizes
any national banking association with
minimum capital of 100000 to
establish branches in foreign countries
for the furtherance of foreign COM
merce of the United States, and to
ate as fiscal agents OF the United
States abroad"
The federal reserve board is requir-
ed to pass upon all applications Of ma
tional banks to establish such banks
abroad.
Laws To BE Repealed.
The federal reserve board would be
clothed with such administrative pow
ers as examination, reclassifcation
and designation Of reserve banks. dis
cipline of officials of federal reserve
banks and receiverships. Certain por
lions of the existing banking laws
would be repealed. the Aldrich-Vree-
land emergency currency act would
be completely superseded. and IN a
separate bill general revision of the
administrative provisions of the ma