The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-07-15

In the closing portion OF his ad-
dress on the administration currency
bill, delivered before the recent Min
nesota Bankers association con-
vention at Duluth, George M. Key
nolds president Of the Continental
and Commercial National bank OF
Chicago, took exception to the reserve
provision as a heavy handicap ina
will defeat the purpose of the legls-
lation. He declared speculation Will
exist as long as the desire for gain IS
Unborn in the human race, but asserted
that If a proper system or oanklns
and currency Were adopted, most Oh
the evils alleged to be created through
the concentration of capital would
disappear. The banks are. now forced,
he said, to resort to stock exchange
loans because that is the only avenue
through which it is possible for them
to secure liquid paper on which funds
can be collected Immediately. This
bill. as it stands, Mr.. Reynolds said,
Is a compromise between the con-
s~ervative and the radical members CT
the democratic party II since II mas
many good qualities 1t. would require
only the application of the spirit OF
cooperation between the legislators
and the bankers to make 1t fairly ac-
c0pldDlo " dlt ~hA' 49, SA~
dicted that many banks throughout
the country will not become subscrib-
ers TO the plan in case It is adopted
as it now reads. declaring especially
thar tho small banks will decline TO
come in. Mr.. Reynolds said:
"An important section OF the bill
is Thai which relates to the reserves
of the member banks of the federal
reserve banks, or u present banklng
institutions.
20 Under existing conditions, the ma
tional banks in the country town ana
cities outside of reserve cities are re-
quired to. carry reserves OF 10 per
cent two-ifths of which, or 3 per
cent. must be in cash in their vaults,
and the other three-fifths. or 3 per
cent, may be carried with their CORE
spondents in reserve cities.
under the proposed law, 1t is pro
vided that within sixty days from and
after the date When the secretary OF
the treasury shall have officially an
no1lnced the fact that a federal reserve
bank has beer established, every ma
tional banking association, as well as
state banks which become members
shall establish with the federal reserve
bank of it's district a credit balance
On the books of that bank equal to not
less THAN d per SCAlt W Is W. SSScI
| demand liabilities, exclusive of circu-
| lating notes, and at the end of four
teen months from the date fixed by the
secretary of the treasury shall in
crease the said 8 per cent to 5 per cent;
| such balance may at any time be IN
creased. but at no time shall 1t be al
lowed to fall below the amounts afore-
said.
Reserves in Country Banks.
"From and after the date set by
the secretary Of the treasury and OIL
cially announced by him, 1T shall DC
the duty of member banks now classi-
fed as country banks and situated
outside of central reserve and reserve
cities, to maintain a reserve equal 10
is per cent Of the aggregate amount
of their deposits. Such reserves shal
consist of s per cent of lawful money
held actually in their own vaults, and
for a period of fourteen months from
the date aforesaid shall consist of at
least 8 per cent and thereafter of at
least S per cent, with its district fed
eral reserve bank. The remainder OF
Is per cent reserve hereinbefore
required may, for a period of thirty
six months from and after the date set
by the secretary of the treasury, con-
sist Of balances due from national
banks in reserve or central reserve
cities, as now defined by law.
From and after q date thirty-sia
months subsequent to the date set BY
the secretary of the treasury, the said
remainder of the required reserve, OF
S per cent, shall consist either Of law
full money in their own vaults, or q
balances on deposit with the fedora
reserve bank in the district In which
they are located, or both, provided the
federal reserve hoard in its discretion
permits such remainder, or 5 per cent
Of. the reserve required to consist 81
balances on deposit with banks in re
serve or central reserve cities as de-
fined BY law. In other words. aftel
the plan has become fully operative
the s5-called country bank member:
Eof the federal reserve bank OF AM
| district viii be obliged TO carry 3 Pc
cent Of their lis per cent reserve IL
lawful money Iii their vaults s ne
cent with the federal reserve bank
and the remaining per cen
| wherever the federal reserve board II
its discretion may reqnire
"Banks In reserve and central reserv'
cities will be required during perio'