Albuquerque evening herald. [volume] (Albuquerque, New Mexico) 1911-1914, 1913-12-23

dussrioi or commercial purposes or tho
proceeds OF which have been used or
are 90 be used for such purposes. the
fcdcfal reserve board 10 have the
right 80 determine or define the char
a,tcr az tho paper thus eligible TOR
discount within the meaning OF the
act.
Nothing IN this act contained shall
be- construed to prohibit such notes.
drafts and bulls of exchange. secured
/ by riapic agricultural products. or to
other goods. wHfes or merchandise
from being eligible for such discount;
hut such definition shall not include
notes drafts or BILLS covering merely
( investments or Issued or drawn for
J the purpose Of carrying or trading In
stocks. bonds 0f other Investment SCI
! rurlties, except bonds and notes ~
The government of the United states
Notes, drafts and bills admitted 90
discount under the terms OF this pnr-
ngraph must have maturity az The
time Of discount OF not moro than 90
days provided that notes. drafts and
bills drawn or issued for agricultural
purposes or based on livestock and
having maturity NOS 10 exceed ak
months may be discounted IN an
amount 10 be limited to q percentage
oi che capital OF the federal CreglonnD
reserve bank 10 De- asccrsalnod ana
fixed hy the federal reserve board.
tn regional banks may also dls-
count accepiances based on the i'm.
poriation or expectation or domestic
shipments 81 goods.
The new treasury notes which are
90 furnish the elastic element In tho
currency system and TO add TO iin
countries circulating money On time
OF need. viii come into use In tho fol-
! lowing way:
The notes viii be printed by the
government with distinctive sivle
Tor each regional reserve hank. one
1 OF the directors named by tho fed
eral reserve board Tor each regional
hank viii be known az the federal re-
servo agent for that bank aud a sun
ply OF the notes will be placed I'm his
custody.
should regional bank desire TO
/ pay out more money than rs cash
resources viii permit, the law pro-
Fldes that it may put some OF ~ re-
! discounted commercial paper into the
hands Of the federal agent" and rc.
oeivc in return the new treasury
/ notes. For each note that Il puts
out INTO circulation tho regional re-
serve bank must ~et aside in gold 90
per cent of the value of the motto. as
/ a guarantee for It's redemption.
This gold with the commercial
paper held By The federal reserve
/ agent Is the protection behind the
new money; but these notes win also
he guaranteed by the government.
and may be redeemed in gold Al the
/ United states treasury
Each regional bank, under the act
must keep reserve OF 30 per cent
OF the deposits IL has received, besides
the 40 per cent gold reserve behind
/ treasury notes 10 ISSUES. II the gold
! reserve behind the mates falls below
| 40 per cent, heavy tax is imposed
on the hnnk. winch IN turn adds INC
/ TAX 20 tho rate n charges member
J uonHs Tor re-discOunts. This WAS de-
signed 10 stop an Cgcr-expansion OF
currency. In times OF sudden stress
I tho federal reserve bonrd can sus-
pend these reserve provisions In order
!
munity. one regional bank cannot
again pay out the notes of another
except under a heavy tax. These
notes arc expected 20 return 60 Inc
regional banks aud Doe withdrawn
nom circulation with the need for
their use passes.
none OF the existing forms of cur
ren'y except tho national bank notes
viii be distributed Dy the now law.
Ihe United states notes used 10 "a
cure the issue of national bank notes
are To be taken up with the rate OF
s-',o00,oeO year by the regional re-
serve BANKS and new treasury notes
or short term three per cent bonds
VIII take their place. National banl
currency Is expected gradually 10 re.
tire.
The federal reserve board win ex-
ercise anal control over the entire
cooperation Of the system. Il can com.
pen one regional bank to loan tn an
other In time OF need can SUSPEND AM
restriction surrounding the reseryes