Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1913-12-27

The aggregate OF such notes ana
bills bearing the signature or indorse-
ment OF any one person. company or
firm or corporation redlscounted for
any one bank shall at no time exceed
10 per centum OF the unimpaired capt.
tai and surplus OF said bank. but this
restriction shall not apply TO the dis
count of bills OF exchange drawn in
good faith against actually existing
| values.
ANY member bank may accept drafts
or bills OF exchange drawn upon 1t
and growing out OF transactions in
volving the importa ton or expectation
of goods having not more than six
months sight to run. but no bank shall
accept such bills to an amount equal
at any time in the aggregate TO more
than one-half OF its paid up capital
stock and surplus.
Open Market Operations
! Sec. IA. Any federal reserve bank
may. under rules and regulations pre-
scribed by the federal reserve board,
purchase and sell in the open market
/ at home or abroad. either from or to
domestic or foreign banks, firms. cor
I porations or individuals. cable trans
]
: bills of exchange of the kinds and ma
I TURTLES by this act made eligible for
rediscount with or without the indorse-
! ment OF a member bank.
Every federal reserve bank shall
! have power:
/ (a) To deal in gold coin and bullion
at home or abroad. 10 make loans
! thereon. exchange federal reserve
notes for gold. gold coin or gold GER
tiicates and to contract for loans of
gold coin or bullion. giving therefor,
when necessary. acceptable security.
including the hypothecation Of United
States bonds or other securities which
federal reserve banks are authorized
to hold:
(b) To buy and sell at home or abroad
bonds and notes OF the United States
and bills. notes. revenue bonds and
warrants with a maturity from date
OF purchasing OF not exceeding six
months. issued in anticipation OF the
collection OF taxes or in anticipation OF
the receipt OF assured revenues by any
state. county. district. political 'suhdi-
gisiou or municipality I'm the CONT
mental United States. including irri-a-
ton. drainage and reclamation dis
trfcts. such purchases TO he made in
accordance with rules and regulations
prescribed by the federal reserve
board:
(cl To purchase from member banks
and to sell. with or without its in
dorsement. bills OF exchange arising
out OF commercial transactions as
hereinbefore dcfined:
Gdl To establish from time TO time.
subject 10 review and determination
of the federal reserve board. rates OF
discount to be charged by the federal
reserve bank for each class OF paper.
which shall he fixed with view OF ac
commodating commerce and business:
lei To establish accounts with other
federal reserve banks for exchange
purposes and. with the consent OF the
federal reserve board. TO open and
maintain banking accounts in foreign
countries. appoint correspondents ard
establish agencies in such countries
wheresoever II my dean hest for the
purpose OF purchasing. yellins and col
lecting bills of exchange. and TO buy
and sell with or without its indorse-
ment through SUCH correspondents or
agencies, bills of exchange arising out
of actual commercial transactions
which have not more thnn ninety days
70 run and which bear the signature
OF two or more responsible parties.
Section ID provides that moneys held
In the general fund OF the United
States treasury. except the ) per cen
tum fund for the redemption of out
standing national bank notes and the
funds provided IN the act for the re-
nP
may be deposited in federal reserve
banks which shall act as fiscal agents |
and that the funds OF the Philippine |
Islands. the postal savings and any |
other government funds must be de- |
posted in federal reserve banks.
Section 1D provides for the issuance |
OF federal reserve notes to federal re-
serve banks, redeemable in gold on de- |
mand at the treasury department or
In gold or lawful money at any fed I
eral reserve bank. The collateral Sc
curity shall be notes and bills accept
ed for rediscount under section Is.
Federal reserve banks shall have
gold reserve OF 40 per cent OF their
federal reserve notes and shall main
tain in the United States treasury in
gold a reserve OF not less than 5 per
cent of the federal reserve notes for
their redemption.
Section II repeats laws requiring ma
tional banks to deposit government
bonds with the United States treasurer.
Section IS provides a plan for retir-
ing the per cent bonds on which the
present currency is based. Under the
plan S2J.O00,0O0 worth of these bonds
will be purchased each year beginning
two years after the system is placed 10
operation. by the new regional banks
from member banks. On one-haif OF
its holdings each regional bank may is
sue currency. The remainder will he
refunded in 3 per cent thirty year
bonds or per cent one year treasury
notes. which the banks must agrees TO
renew each year for thirty years.
Section 10 describes how member |