The Madisonian. (Richmond, Ky.) 1913-1914, 1913-06-24

L 00SAA
bursements drawn against such de-
posits.
The federal reserve banks may be re
CURED to pay interest on government
deposits, but shall not pay interest on
any other,
The government and state banks de-
posting in the federal reserve banks
shall be the only depositors in the re-
serve banks
An issue of 100000, 900. plus an
amount equal to the amount Of ma
tional banks notes which may be re-
tired, Ia authorized.
This issue shall he 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
notes as it may desire, such applica-
ton to be accompanied with an offer
of collateral security tc, protect the
notes, equal in amount tn the sum ap-
piled for.
Whenever any federal reserve bank
shall disburse federal reserve trasury
notes, 1t must hold in its own vaults
gold or lawful money equal in amount
to 33 1-3 per cent. of the treasury notes
80 paid out by It.
Federal reserve banks. may be re-
CURED to deposit in the treasury a
sum in gold or lawful money equal
to 5 per cent. of whatever amount Of
federal reserve treasury notes issued
to it.
Exchange of collateral put up for
notes is provided for.
Service AZ Clearing House.
The federal reserve board may act
as clearing house for federal reserve
banks, and may also require each such
bank to exercise the functions of a
clearing house for it's shareholding
banks.
Provision Is made for the reduction
and wiping out Of liability by federal
reserve banks
The secretary of the treasury is di-
rected to exchange United States per
cent. bonds, bearing the circulation
privilege of 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
Every national bank may receive cir.
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
Demand for Bank Reserves.
Within 50 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
not less than three per cent of its
own total demand liabilities, exclusive
IA months this amount shall be In
creased to five per cent.
National banking associations clas-
sif1ed as country banks and situated
outside of central reserve and reserve
cities must maintain a reserve equal
to 15 per cent Of the aggregate
amount of their deposits. National
banks in reserve cities must maintain
reserve of 25 per cent. of their out
standing deposits for 26 months after
the passage Of the bill and for Il
months thereafter 22115 per cent, and
at the end of 38 months permanently
reserve of 90 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 S3 1-3 per cent. Of its outstand-
ing demand liabilities
Drastic Examination Provided.
Drastic and frequent examination Of
national banking associations are pro-
vided for.
Any national bank making loan or
| gratuity to an examiner Is subject to
a fine of 81 200 and the officer or off,
| 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 office.
No officer or director of 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 $1,000 or by a peniten
tiary sentence of three years, or both
/ 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 a reserve city may
make farm loans, equal to % per cent
,of it's capital and surplus or 80 pei
cent of it's time deposits.
Any national banking association
capitalized at $1,000, 900. or more may
through the federal reserve board. es
tablish branches in foreign countries
The bill describes itself as "a bill t,
provide for the blishment of fed
eral reserve banks for furnishing al
elastic currency, affording means fo
rediscounting commercial paper an,
to establish more effective super
-