The Bridgeport evening farmer., 1913-12-24
A MERRY CHRISTMAS
 TO ALL
E. H. DILLON & co.
10 RUE ST. oDCKuE RaEa

the purpose of carrying or trading in | stocks, bonds or other investment se- | curities, except bonds and notes of the government of the United States Period Is Limited.
 Notes. drafts and bills admitted to discount under the terms of this par agraph must have a maturity at the time of discount of not more than 90 days: Provided, that notes, drafts and bills drawn or issued for agricul- tural purposes or based on live stock and having a maturity not exceeding | six months may be discounted In amount to be limited to a percentage of the capital of the federal regional reserve bank, to be ascertained and fixed by the federal reserve board The regional banks may also dis count "acceptances based on the inn portation or exportation. The new treasury notes which are to furnish the elastic element in the currency system. and to add to the country's circulating money in time of need. will come into use in the follow ing way:
 The notes will be printed by the gov ernment, with distinctive style for each regional reserve bank. One of the three directors named by the fed- eral reserve board for each regional
 
 reserve agent for that bank. and 8 supply of the notes will be placed in his custody.
 Uses of Agent.
 Should a regional bank desire to pay out more money than it's cash resources will permit, the law provides that it may put some of its rediscount- ed commercial paper into the hands of the federal reserve agent" and re- aCTTT notes. For each note that it puts out into circulation, the regional re- serve bank must set aside in gold 40 per cent. of the value of the note, as a guarantee for it's redem mption. This gold, with the commercial paper held by the federal reserve agent Is the protection behind the new money; but these notes will also be guaranteed by the government, and may be redeem ed in gold at the United States treas ury.
 Each regional bank, under the act, must keep g. reserve of 35 per cent. of the deposits it has received, besides the 40 per cent. gold reserve behind the treasury notes it issues. If the gold reserve behind the notes falls be- low 40 per cent. a heavy tax Is inn posed on the bank, which, in turn, adds the tax to the rate 1t charges member banks for rediscountSL This was designed to stop an over-expan- sion of currency. In times of sud den stress. the federal reserve board can suspend these reserve provisions, in order to furnish quick relief to any community.
 Heavy Tax Provided.
 One regional bank cannot again pay out the notes of another, except un- expected to return to the regional banks and be withdrawn from circu- lation when. the need for their use passes.
 None of the existing forms of cur rency, except the national bank notes, will be disturbed by the new law. The United States bonde, now used to se- cure the issue of national bank notes, are to be taken up at the rate Of $25,- 100000 a, year by the regional reserve banks and new treasury notes, or short term three per cent bonds will take their place National bank cur rency is gradually to retire.
 The federal reserve board will ex- ercise final control over the entire 1 operation of the system. It can com 1 pei one regional bank to loan to an- other in time of need; can suspend all | which regional banks must hold; and l can remove directors of regional re- l serve banks whenever 1t is believed | necessary.
 Wh1Ie the banRS FeLaln control or | the boards of the regional reserve | hanks, their connection with the fed era1 reserve board is only through an I advisory council, made up of one rep resentative from each federal reserve district. This council will meet in Washington, to confer with the fed eral reserve board lon general busi- ness conditions and to make recon- and suggestions concern ing discount rates, note issues and re- serve conditions.
 An important change in national banking methods, embraced in the new law, will permit all national banks except those in New York, Chi cago and St. Louis, to make direct loans on fve-year farm mortgages, up to 25 per cent. of their capital and surplus, or up to one-third of their time deposits.
 Another provision in the law per mits national banks having g. capital | Of $1,Oo0,ooo or more. to open foreign branches, Similar authority is giv- en to the regional reserve banks, the l purpose being to facilitate the develop ment of American trade abroad.