The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1913-12-23

pected TO go back into tHc hands Of
the government when times are nor
NAL. These ''treasury notes. will be
printed by the government and issued
through each regional reserve bank
and-will bear the guarantee both OF
the regional bank and the govern
ment.
IL tho demand for currency IN any
section OF the country exceeds the
supply OF circulating money re-
gional bank can secure this now
money from the government and put
II into circulation, but gold reserve
of 40 per cent and commercial paper
equal to the full value OF tie note
must be held as q reserve behind each
note so issued This provision Is ex-
pectcd TO be the influence that will
drive the new money back into re-
tIrement when 1t IS no longer needed.
The following analysis presents the
details of the new law without nd
herring closely TO the technical divi-
sion or language of the measure.
Federal Reserve Board.
At the head OF the system will
stand federal reserve board at
Washington appointed by the presI
dent and To consist OF the secretary
the currency and five other members.
Two of these shalt be expert bank
ers, but none shall have banking ar
citations or own bank stock during
their service. This board VIII exer-
else general control over the entire
system.
The temporary .'orga nization com
mittee or the federal reserve board
will select from eight to twelve cities
where regional reserve banks shall
be located and Will divide the entire
country geogra phically with these cit
les as the centerS OF districts. All
regional banks In a district will be
required 10 subscribe for the stock OF
the regional reserve bank in that dis
trict and TO keep a portion OF their
reserves there.
Member Banks.
Local banks will he known as
member banks" because they Will
own the stock OF the regional reserve
bank OF their district. Each member
bank VIII be required 10 take capital
stock OF the regional reserve bark
equal to 5 per cent OF the member
hanks capital and surplus. The cap
ital Of the regional bank will increase
or decrease so that II always repre-
sents per cent OF the combined
capital and surplus of all the banks
OF the district that have Joined the
system.
National banks ere compelled 10
join and state banks are permitted
10 II they bring their reserve require
ments up 10 the standard set for ma
ticnal banks and submit TO national
examinations
Public ownership of the stock OF
the regional reserve banks Is per-
mltted only in case enough ba nlls do
not join In any district 10 provide a
capital stock OF $4,000, 900. In such
event the public may purchase the
stock in quantities limited to $4,000
for each individual but the voting
OF this stock will be placed in the
hands OF government representatives
on the board of directors of the re-
sionai reserve bank.
Restricted to Member Banks,
The regional reserve banks NAV do
business only with their member
banks, not with the public, except
that certain open ma rket operations"
such as the purchase and sale OF
gold. government or municipal bonds
and certain forms Of bills OF exchange
are permitted These banks Will
make their earnings from the loans
made to member banks and from the
purchase and sale OF bonds and for
eign bills or exchange.
Member banks Will be compelled to
put up in cash only one-haif of their
subscription to the capital OF the new
banks; the remainder can be called
for II needed by tho regional bank
on this stock to the member banks
and the stock will be non-taXab Bile
After these dividends are paid one
half OF the surplus net earnings goes
TO create q regional surplus fund,
and when this has reached 40 per
cent OF the regional banks paid-in
capital. these earnings are to go Into
the United States trea sury. The bal
ance OF the net earnings are to be