Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1913-12-25
banks, by depositing this security.

| nc new regional DduhS Will ItCelVc
about one-half of the bank reserves Of
the country. They, IN turn, will be
permitted to loan back to the banks all
hut 35 per cent of these reserves, so
that in case Of emergency, millions Of
! cash can be brought out into circula-
! ton quickly. The banks will have
I to pay for these loans, however, as in
dividuals have to pay for loan from
any local bank; and this charge is ex-
/ pected to prevent the toofree use OF
the reserves held by the regional
banks.
! A new form of paper currency is
| also provided for, to come out in case
Of emergency; and which Is expected
! to go back into the hands of the gov
eminent when times are normal.
These treasury notes. will be print
ed by the government, and issued
| through each reserve bank. and will
bear the guarantee both of the Region
al Bank and the government.
! If the demand for currency in any
section of the country exceeds the sup
! ply of circulating money, Regional
Bank can secure this new money from
the government and put it into circu-
lation: but a gold reserve Of forty per
cent, and commercial paper equal to
the full value of the note, must be held
as a reserve behind each note so is
sued. This provision is expected to be
the influence that will drive the new
money back into retirement when 1t is
no longer needed.
The following analysis presents the
details of the new law without adher-
ing closely to the technical division or
| language of the measure.
| At the head of the system will stand
federal reserve board at Washington
appointed by the president and to con-
sist of the secretary of the treasury
, and six other members. Two Of these
shall be expert bankers, but none shall
have banking affiliations or own bank
stock during their service. This board
will exercise general control over the
entire system.
The temporary Reorganization COM
nittee," 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 geographically with these
cities as the centers % distr cts. All
national banks in a district will be re-
quired to subscribe for the stock of the
regional reserve bank in that district,
/ and to keep a portion of their reserves
there.
Local banks will be known as "men-
Der banks because they will own the
stock Of the regional reserve bank of
their district Each member bank will
be required to take capital stock OF the
regional reserve banns and to pay six
per cent of the member banks cap
| ital and surplus. The capital of the
regional bank will increase or decrease
so that it always represents six per
cent of the combined capital and sur
plus of all the banks of the district
that have joined the system.
National banks are compelled to
join and state banks are permitted to
! if they bring their reserve require
ments up to the standard set for ma
tjonal banks and submit to national
examinations.
Public ownership of the stock of the
regional reserve banks is permitted
only in case enough hanks do not join
in any district to provide capital
stock of $3,O0O,000. 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 govern
nent representatives on the board Of
directors Of the regional reserve bank
| The regional reserve banks may do
business only with their member
hanks, not with the public, except that
certain "open market operations such
as the purchase and sale of gold, gov
eminent or municipal bonds, and GER
tain forms of bills CT exchange, are
permitted. The banks will make their
earnings from the loans made to
member banks, and from the purchase
and sale of bonds and foreign and
domestic bills of exchange.
Recess Until Jan. II.
When the senate finishes with cur
rency bill congress reccesses until Jan.
liz. The Christmas holiday vacation
will be the first the tired Legislators
have had since April T. when President
Wilson called them together in extra
session to tackle the tariff and cur
rency problems. The house before
adjourning last night agreed to the
Joint resolution for such a recess and
the senate leaders were prepared to
adopt it today.
Receive Applications.
Applications from national banks in
the south for membership in the new
| federal reserve system are being re-
ceived at the treasury department.
! Among the cities from which applica-
! lions came was Wichita Falls, Texas.
Applications came also from all the
banks in the Kansas City, Mo-, clear
! ing house association.
THEODORE SHONTS
I MEETS DAUGHTER
Now York Dec 23-The Due de