The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1914-01-16
SALT LAKE BANKER
EXPLAINS The new
CURRENCY Law

VSAAAA LA W. AAm w
/ The following extracts from an adj
dress delivered by Mr.. w. Z. Har-
rison of the National Copper Bank OF
| Salt Lake as published in the Deseret
| News should be of general interest
as it gives the details and opration of
the new currency law clearly.
The law calls for not less than
eight nor more than twelve districts,
the boundaries of which are to be de-
termined by the organization COM
mlttee, consisting of the secretary of
agriculture, the secretary of the treas
ury and the comptroller of currency.
"On thirty days notice given by the
organization committee, every ma
tional bank in the continental United
States, except Alaska, must subscribe
for stock in its regional reserve bank
equal to 6 per cent of its own capital
and surplus. One-sixth of this pay
able on call, similar amount in three
months and half of the entire amount
must be paid in six months. The
other half is payable on call of the
federal reserve board. Payments are
to be made i'll gold or gold certih-
Gates. Any national bank failing to
comply within one year, or failing to
comply with the rules after becoming
a member of the reserve board, will
lose its charter.
Any bank or trust company may be-
come a member of the federal reserve
bank by converting itself into a ma
tional bank, or by retaining its state
charter, but complying with the re-
quirements of national banks in re-
spect to capital and reserve, limit of
liability for single borrower, lending
on or purchasing its own stock, impair
ment of capital, payment of un-
earned dividends, regulations made by
federal reserve board, making re-
ports of conditions and the liability of
directors. Individuals, corporations,
or partnerships may subscribe to
stock, provided the bank subscriptions
were not enough to make UP the re
quired capital for a federal reserve
bank, the minimum being $4,0O0,000.
No such stock holdings can exceed
$4,000 and will not be entitled to
vote.
"The federal reserve banks will,
after proper organization, hold a
twenty-year franchise dissolvable
only by act of Congress or violation of
the law, the latter to be established in
the regular manner in the federal
courts. The banks can make con-
tracts, sue and De sued, appoint, bond
or dismiss through its board of di-
rectors, officers and employees not
otherwise provided for in the act.
| ~
ting notes, secured by United States
bonds carrying circulation privileges
in amount equal to the par value of
the bonds and in the manner now pro-
vided for the issuance of national
bank notes except that the size of the
issues is not to be limited to the cap
ital of the bank.
"A federal reserve bank is author
lied to establish branches within its
own district The branch banks will
be operated by separate boards of di-
rectors, four of whom will be selected
by the regional reserve bank and these
by the national reserve board, known
as the federal reserve board
There will be nine directors in each
of the federal reserve banks divided
into three classes. Class A, three men
representing the member banks in the
district and chosen by them; class B,
three men engaged in commerce, agri-
culture or another industry than
banking, but chosen by the member
banks; class G, three men appointed
by the federal reserve board who must
not be officers, directors, employees or
stockholders in any other than the
regional reserve bank. None of the di-
rectors can be a member of Congress
Directors must have been residents OF
the district for at least two years.
The chairman of the board will be
selected from Class c, the federal re-
; serve board being the appointee. The
chairman will be known as the fed
raj reserve agent" and must be per.
son of tested banking experience. His
compensation is to be fixed by the
federal reserve board and paid by the
reserve bank in his district. The
term of office. of directors will be three
years, except at the organization
when the three in each class will be
allotted one, two and three-yeai
terms, respectively.
1t is provided that the stock in tht
federal reserve banks be valued a
SlO0 share each, par. Stockholuer:
are to receive per cent. cumulative
; dividends Half of the net earning,
above that amount will be converted
into surplus until it equals 40 per cent
of the capital The other half of thu
net earnings will go to the UniteC
States government for the discharg,
of bonded Indebtedness or at the op
ton of the secretary of the treasury
or to supplement the gold reserve
against United States notes.
The fact that federal reserve bank
are to be exempt from all taxation ex
cept upon real estate is a distinct ad
J vantage in the matter of operating ex
!. penses.
The composition, duties and power
of the federal reserve board, the sever
men who will be the financial power
It