Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-11-20
Power to Meet Situation.

Power to Meet Situation.
In short, when the law gets into full
operation, bank which is a member
of the federal reserve system will
have at all times the power to meet
whatever situation that may arise
whether an unusual withdrawal of de-
posits, or demand FOR loans of the
character eligible for rediscount.
The new law has many features
that have not been referred to in the
above outline O. its general provisions.
Some of the most important of them
are herewith enumerated:
National banks may be authorized
by the federal reserve board to act as
trustee, executor, administrator, or
registrar OF stocks and bonds.
The stockholders in the federal re-
serve bank shall receive an annual
dividend of 6 per cent, which dividend
shall be cumulative
Federal reserve notes are redeem
able in gold on demand, and shall be
other public dues.
Federal reserve banks can establish
branches within their respective dis
tricts, and also in foreign countries.
National banks are privileged to
make loans on improved farm land,
on the basis of so per cent of its value,
such loans to run not longer than five
years. The aggregate OF such loans
is limited to % per cent of the banks
capital and surplus.
The government rate of discount is
to be fixed from time to time, and
shall be published. This rate neeu
not be the same in ali the districts.
Eventually the reserves of member
banks are to be transferred to the
federal reserve banks. This shifting
of reserves will take place gradually
over a period of three years.
Commercial paper eligible for re-
discount shall have maturity of not
more than 80 days, with a limited
amount of six-months agricultural pa
per, under certain restrictions.
Government deposits will be made
only with member banks. State banks
having postal savings deposits will be
obliged to give them up.
No bank can be admitted to the
system whose capital stock is less
than $4,000.
Member banks are limited in the
loan which can be made by any per
son. firm or corporation to 10 per cent
Of their capital and surplus.
Federal Reserve Notes. !
1t is expected that eventually the
federal reserve notes will take the
place of national bank notes as a cir
medium. National banks
nay retire their circulation at the
ate of 3 per cent a year, and the /
ederal reserve bank shall purchase .
It par the government bonds which .
lational banks now hold as security +
or their outstanding notes.
State banks which become members
IS such may exercise all powers con-
erred by their state charters which
re not in conflict with the specific
PROVISIONS of the federal reserve act.
The law creates an advisory coun-
ii. consisting of one representative
rom each federal reserve bank. This
ouncif shall confer with the federal
eserve board in Washington at least
ur times each year.
The federal reserve board is given
he power to suspend all reserve re-
uirements for stated periods.
1t is expected that the resources OF
he federal reserve banks will be great
Y increased by the deposit of the
enera' fund of the government This
ill keep the current funds of the
United States in che channels of trade,
lstead of being locked up in the
reasury.
The federal reserve board has pow