Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1913-06-25
oe deposited in such banks and dis

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posits. 4, Il (. sls :5.2G
The federal reserve banks may be re-
CURED to pay interest on government
deposits, but shall not pay interest on
any other. ,s,s N; ss9
The government and state banks de-
posting In the federal reserve banks
shall be the only depositors in the re-
serve banks. Il NJ 5
An issue of $5oo.ooo.oo plus an
amount equal to the amount Of ma
tional banks notes which may be re-
tired, is authorized.
This issue shall be made at the dis
erection of the federal reserve board.
Division Of Treasury Notes.
Any federal reserve bank may make
application to the federal reserve
board for such amount Of treasury
notes as it may desire. such applica-
ton to be accompanied with an offer
of collateral security to protect the
notes, equal in amount to the sum ap,
piled for. l.. IS WEI \;
Whenever any federal reserve bank
shall disburse federal reserve trasury
notes, it must hold in its own vaults
gold or lawful money equal in amount
to 33 1-3 per cent Of the treasury notes
SO paid out by it. & .5l 5l..5
Federal reserve banks may be re-
quired to deposit in the treasury a
sum in gold or lawful money equal
to per- cent. of whatever amount Of
federal reserve treasury notes issued
to 1t. Il. 81 Al:
Exchange Of collateral put up for
notes is provided for. 2&133
Service 40 Clearing House.
The federal reserve board may act
as q clearing house for federal reserve
banks, and may also require each such
bank to exercise the functions of q
clearing house for Its shareholding
banks. AL .Ss 4
Provision Is made for the reduction
and wiping out Of liability by federal
reserve banks. IN Ut. 33 4
The secretary Of the treasury is d.
rected to exchange United States 2 per
cent. bonds, bearing the circulation
privilege Of 8 per cent. bonds without
the circulating privilege. When the
outstanding 2 per cents. shall be ex-
changed or refunded the power OF ma
tional banks to issue circulating notes
secured by United States bonds will
| cease. i
Every national bank may receive cir
culating notes under the conditions
prescribed by the bill, but no national
banks shall be permitted to issue cir
culating notes or any substitute there
for. After twenty years national bank
notes remaining outstanding shall be
recalled. 5'sst. ~ g
Demand for Bank Reserves.
Within so days after the establish
ment of a federal reserve bank every
national banking association shall es-
tablish with the federal reserve bank
of its district credit balance on the
books of the latter institution equal to
mot less than three per cent. Of its
own total demand liabilities, exclusive
OF circulating notes, and at the end OF
II months this amount shall be In
creased to Ave per cent.
National banking associations clas-
sified as country banks and situated
outside Of central reserve and reserve
cities must maintain q reserve equal
to Is per cent. Of the aggregate
amount Of their deposits. National
banks in reserve cities must maintain
a reserve of 25 per cent. of their out
standing deposits for rs months after
the passage Of the bill and for IL
months thereafter 22Aa per cent, and
at the end OF SO months permanently
a reserve Of 20 per cent. OF their stand
ing deposits.
Every federal reserve bank must at
all times have In its vaults in gold or.
lawful money a sum equal to not less
than 80 10 per cent, Of its outstand-.
ing demand liabilities. ,55 NJ 5 L
Drastic Examination Provided.
Drastic and frequent examination Of
national banking associations are pro-
vided for. Il az. "a: E'
Any national bank making a loan or
gratuity to an examiner is subject to
q fine Of s., 900 and the onicer or ON
GERS OF the bank. authorizing 1t to an
additional fine Of $500. Any examiner
accepting the loan or gratuity is fined
$500 and disqualified from ONCE.
No officer or director of a national
bank may be a beneficiary Of any
transaction made on behalf OF his
bank. Should he. violate this provi.
sion he will be punished by fine Of
not less than $4,000 or by peniten-
tiary sentence Of three years. or both.
1 Responsibility on Persons.
The stockholders OF every national
banking association will be held in
dividually responsible for all obliga-
tons Of such association.
Any national banking association
not situated in reserve city may
make farm loans, equal to rs per cent
of its capital and surplus or so per
cent. of its time deposits.
Any national banking association
capitalized at 100000 or, more may,
through the federal reserve board, es-
tablish branches in foreign countries.
The bill describes itself as "a bill to
provide for the establishment of fed
eral reserve banks for furnishing an
elastic currency, afording means for
rediscounting commercial paper and
to establish more effective super
vision Of banking in the United States,
and for other purposes"
1t prescribes that the short title Of
the act shall be the federal reserve
act" The second section which re-
lates to federal reserve districts" re-
quires that within 60 days after pass
age CT the bill the secretary of the
treasury, the attorney general, and the
controller Of the currency, acting as
a reserve bank organization commit
tee, shall designate from among the
reserve the cities now authorized by
law number Of such cities. not less
than IL to be known as federal reserve
cities, and shall divide the contincn-
tai United States into districts, each
district to contain one Of such federal
reserve cities.