The Tabor independent. [volume] (Tabor, S.D.) 1913-19??, 1914-01-01

Iantes both o. the regional bsnl and
the government.
II the demand FOR currency ia any
section OF the country exceeds thc
supply OF circulating money, a regional
bank can secure this new money from
the government and put II into circu-
lation; but q gold reserve Of 40 per
cent and commercial paper equal to the
full value OF the note must be held as
Thls provision Is expected to be the
influence that win drive h new
money back into retirement when Ii Is
no longer needed.
The following analysis presents the
details OF the new law without adher-
Ing closely to the technical division OF
language OF the measure;
AZ the head OF the system will stand
. federal reserve board at Washington
specified by the president. and to con-
sfst OF the secretary or the treasury
tn controller of the currency and five
other members, Two OF these shall be
expert bankers, but none shall have
banking affiliations or own bank stock
during their service This board will
exercise general control over the entire
system.
The temporary Organization com
mtttee" OF the federal reserve board
will select from eight to IL cities where
regional reserve banks chall be located,
and viii divide the entire country geo
graphically with these cities as the cen
ters OF districts. All national banks In
2 district viii be required to subscribe
for the stock OF the regional reserve
bank In that district and to keep d por-
ton OF their reserves there.
Local banks will be known as mem
Der banks" because they will own the
stock OF the regional bank or their dis
trtct. Each member win be required ia
take capital stock OF the regional re-
serve bank equal to 6 per cent OF the
member banks capital and surplus
The capital OF the regional banks will
increase or decrease so that it always
represents 6 per cent OF the combined
capital and surplus OF all the banks OF
the district that have joined the sys-
tenn.
National banks are compelled to Joln
and state banks are permitted to II
up TO the standard set FOR national
banks and submit to national examine
Itions.
Public ownership OF the stock of the
regional reserve banks Is permitted
only In case enough banks do not join
In any district TO provide capital
stock OF sa,000.O0O. In such event the
public may purchase the stock In guam
titles limited to $l0,0 900 to $2b, 900 for
each Individual; but the voting OF this
stock will be placed IN the hands OF
government representatives on the
board OF directors Of the regional re-
serve bank.
The regional reserve banks may do
business only with their member banks
not with the public. except that certain
open market operations such as the
purchase and sale Of gold, government
or municipal bonds and certain forms
OF bills OF exchange are permitted,
These banks will make their earnings
from the loans made to member banks
and from the purchase n sale OF
bonds and foreign bills of exchange.
Member banks win be compelled to
put up In cash only one-half Of their
subscription 10 the capital OF the new
banks; the remainder can be called
for IL needed by the regional bank,
Dividends OF 6 per cent will be paid on
this stock to the member banks and the
stock will be non -taxable. After these
dividends are paid one-half OF the sur
plus net earnings goes to create q re-
gional surplus fund, and when this has
reached 40 per cent OF h regionai
banks paid IN capital these earnings
are to go into the United States treas
TRY. The remainder or the net earn
lings are to he paid to the United States
as d franchise tax.
with the machinery thus created for
a new banking system that lis sipple-
msntary to the commercial banks Of the
country, the law provides for a gradual
transfer OF part Of the bank reserves
10 these new reservoir" banks. In
order not to disturb business condi-
lions or to Withdraw too suddenly the
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