Bonners Ferry herald. [volume] (Bonners Ferry, Idaho) 1904-current, 1914-04-10
Workings of Law.

Washington Although various
steps still must be taken before the
new federal reserve banking system
begins operations, treasury officials
expect that the IL regional reserve
banks would open for business within
three months and that the revolution
airy change in the nations financial
machinery would be an accomplished
fact within that time. With the des-
ignation of the reserve centers, the or
ganization committee took the first de-
cisive step toward perfection of the
system.
The first work was official certifi-
cation to Comptroller of the Currency
Williams the task of notifying every
one of the 754S national banks which
have applied for membership.
Every member bank under the law
must begin payment of a subscription
of 6 per cent of it's capital and sur
plus to the stock of its reserve bank
within thirty days after notification.
In accordance with the law, as soon
as the member banks in district have
subscribed the minimum amount of
stock for a reserve bank-$4,0 ZOO, 600
five banks will be designated to ex-
ecute the formal certificate of organi-
cation. After it's reception here the
reserve bank will become a corpora
ton and entitled to do business.
The next step will be the selection
of boards of directors for the reserve
banks. There will be nine directors
for each bank, three to be appointed
by the federal reserve board, which it.
self is yet to be named by President
Wilson, and six elected by the member
banks in each district.
Although the federal reserve board
is to choose three directors in each re-
serve bank and appoint a reserve
agent for each bank, two are to act
as its mouthpiece, the organization
committee may perfect the organiza-
ton of a reserve bank for all practi-
cal purposes before the reserve board
is appointed and it is believed that the
committee will exercise this authority
to launch the system as soon as pos
sible.
In the opinion of officials here the
transfer of money from member banks
in payment of their subscriptions
to reserve banks will be accomplished
without disturbance to business and
without any curtailment of credit or
retrenchment in loans or discounts.
The law gives nearly a year to the
banks for the payment of one-half of
their total subscriptions and it was
believed that this time would prove
sufficient in every case
Branches Later.
The organization committee was not
! branch banks of the federal reserve
banks, but the act states that such
banks shall be established. This task
will be left to the supervision of the
federal reserve board yet to be ap-
pointed by President Wilson.
Banks Vote Considered.
One fact that was brought out was
[ that a poll of all the national banks
which had signified their intention OF
entering the system was taken into
: consideration in naming the cities In
! each district but one a majority of the
t committee as a reserve center.
: Under the present system more thar
+ 00,000,000 of reserve from small
banks throughout the country il
usually on deposit in banks in the -four
g great cities. In times of stress, as in
D 1909, much of this great sum is out II
+ call loans. When a crash comes, Il
t was argued. the small banks are likely
: to find themselves unable to get theil
: reserve funds from these cities.
! 1t was largely to cure such a cor
+ dition, II was said, that the districts
s were designed to be as nearly alike IL
4 capitalization of reserve banks as pos
9 sibie, with the idea that there shall
be no such concentration of reserve!
in the future.
0 Some people are too busy talkin,