The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1913-06-25
or with the reserve bank" -.
The statement saws:

or with the reserve bank.
The statement says:
The presumed effect Of this plan
Will be to end the placing of re-
serves with central reserve city banks
Tor use in stock market operations,
nome and to require spectators to
get the funds they need in their op-
erations either by directly borrowing
them from persons 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 un-
satisfactory, that to the massing of
funds in New York and other finan-
cial centres, of which so much has
been said in recent years, is largely
due to the present reserve require
ments of national banks and that in
order to get the real benefit of the
system of rediscount which has been
proposed as remedy for many ex-
listing evils it is necessary to base
such system upon an actual control OF
reserves, provision has been made for
recasting the present bank reserve
system.
! THE bill is based on the belief that
no one should participate i'm the con-
troll OF the system unless he is finan-
cially interested himself, or chosen
by those who are, except in so far
as the government steps in and as
serts the authority of the whole COM
munity. With this in mind, the sys-
tenn has been devised so as to pro-
vide for the continuation of exist
ing national banks with their organi-
Zation, powers and functions unchang-
I ed. In addition there is established
a system Of federal reserve banks.
which are Incorporated institutions
holding federal charters and in all
respects managed like national banks.
except as TO the election of directors.
There are II Of these federal re-
serve banks, each managed by a board
/ of nine directors, three Of whom will
be expert bankers selected by the
banks, three will be members selected
in the same way but representing the
commercial, industrial or agricultural
interests Of the district and subject
to removal by the federal reserve
board in case they do not fairly rep
resent these interests. The remain
ing three directors are to be chosen
by the federal reserve board.
THE object of the bill is to effect
n moderate division and classification
of banking business along indicated
lines, the result presumably being
summed up as follows:
National reserve banks will be
strictly limited to rediscounting ac-
tual commercial and industrial trans
actions evidenced by very short term
paper and on rare occasions. under
carefully prescribed conditions, to
/ financial operations protected by col
lateral. They will also be able to
engage in foreign exchange opera
tions, etc.
National banks will be subject to
precisely the same restrictions as ut
present with a relaxation in favor OF
a moderate amount of real estate
loans by country banks under care
fully guarded conditions.
by revision of the administrative
features OF the national banking act,
provision will be made for close over
sight of national institutions with a
view 10 holding them strictly up to
the requirements of u legitimate bank
ing house.
In order to possess themselves of
the Kind of paper emitting them to
rediscounts. national banks will find
themselves obliged to keep a rason-
able proportion of their assets i'm the
form of paper eligible for redis-
counting.
1t is believed that the present sub
treasury system is unsatisfactory,
clumsy, injurious to business and diff
fcult to manage in time of stress.
The bill therefore provides for:
/ "The placing of all current funds
of the treasury in federal reserve
banks and the payment of govern
ment creditors by check thereon.
The equalization of the public
funds between the different reserve
banks by direction of the secretary
3nd subject to a rate of interest to