Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1914-11-16
ASKED TO SEND RESERVES
IN COLD OR CURRENCY
Institutions in Fifth
District.
NOT READY FOR REDIscouNTING
Cannot BE Undertaken Until Reserves
Have Been Paid In and All De-
tails Worked Out-Plans for Col
lection Of CIcarings.

Governor George j. Seay. of the
Iichmond Reserve Bank, last night, is
sued Il comprehensive bulletin bearing
upon the relations of the 475 member
banks OF Fifth District to the central
bank in this city. 1t sets forth clearly
= their immediate obligations as menu
4 bers of the Federal reserve system
@ The bulletin, Il copy OF which was
s mailed last night to every member
bank in the district, follows:
TO All Member Banks of the Federal
s Reserve Bank OF Richmond, Dis
trict Number Five:
Member banks will. of course, under
stand that Federal reserve banks on
opening on the sixteenth instant, can
not, in the nature OF things, ut once
spring into full operation with the
machinery of completely organized
banks ready TO perform all their func-
Z tions under the act.
The first step will he the transfer OF
reserves as required by law. The meth
t5od of calculating reserves has been
fully explained In circular from the
& Comptrollcr's Office a copy of which
will be sent YOU. Other steps will fol-
low rapidly iii due course.
! 1tEDISCOUNTING CANNOT BE:
UNDERTAKEN IMMEDIATELY
Rediscounting cannot be undertake
en- Immediately upon opening or until
after the reserves shall have been paid
in and all the details preliminary to
redfscount of papea have been worked
cut and fully laid before members. and
the regulations relating to the differ
4 ent classes, of paper have been fully
understood, In order TO avoid serious
& confusion. The authority TO redscount
Will first have to he formally granted
~ by the Board of Directors of each mem
her bank OH forms to be furnished.
1t is apparent that collections and
olearingS cannot at the beginning be
undertaken. The volume of this bust
I;ess to be done Is of such huge pro-
portions that it will have to be APP
preached with great care and prepa-
ration on the part OF the reserve banks
Active accounts with member banks
Il cannot, therefore, be carried until due
notification is made.
After the initial payment of reserves
shall have been made. checks drawn
by any member bank on this bank or
on any member bank in the cities of
Richmond, Washington or Baltimore.
The reserve cities of this district, will
be received on deposit for the credit
of members
This understanding among all the
reserve banks of the country was
reached ut a conference between the
directors and officials of the reserve
banks and the Federal Reserve Board.
MAKE RESERVE PAYMENTS
IN LARGE DENOMINATIONS
The amount of reserve of member
banks to be transferred in cash to
the Federal Reserve Bank of Richmond
will approximate $4,000, 10000. The
!. labor and difficulty OF handling
/. this great volume of money with safe
" and dispatch will be very considera-
hle. Member banks are asked to he
considerate, and TO send in to the re-
serve bank gold and currency OF as
large denomination ms can he furn-
ished.
The reserve bank cannot consent to
accept currency mutilatcd and unfit for
circulation. Gold coin, If not mutt
lated or SO badly worn as to be clearly
uncurrent, will he received at its face
value and not subject to weight. Ma
,ional bank notes cannot, of course.
under the law, be received in payment
for reserves.
The power of the reserve banks to
grant rediscounts and to most effec-
lively aid tho member banks to re-
lire the emergency currency issued in
this district which amounts TO about
S20,0O0,000.00. will bear direct and
intimate relation TO the amount of gold
and gold notes paid in.
Membcr banks will, therefore, great
~ strengthen their Reserve Bank
that source upon which ut times they
will be compelled to rely for help
by paying from their vaults goA! land
gold notes to the fullest eXtfnt ,I,os-
sibe. The eyes of the country will.
therefore, be on the amount OF gold
held by the reserve banks, and IL is
earnestly desired that the Bank of
the Fifth District shall take first rank
in the proportion of gold held.
The banking power Of the nation
will be vastly strengthened by the
concentration Of gold in the Federal
reserve banks, and II is only In this
manner that the credit resources Of
this country can be used to the fullest
limit. The immediate eifec: OF put
ting in operation the Federal reserve
act, by -cason of the smaller reserves
required 10 he held ty membe- banks
will make available ain %no;mous
amount OF additional credit ny The
creation cf 81 large total of :,urpluS
reserves among thu mcmbev BANKS
The amount of these surplus reserves
IL calculated upon the condition shown
in their statements of September l..
1914, will be approximately 100000
600. OF which about Sl90,000,0on will
be surplus cash reserves in vault the
balance being held with reserve
agents.
IT will he plainly seen that huge
amount of additional credit Will be
rendered available without recourse to
Federal reserve banks. and that free
dom of discount among member banks
will bc greatly promoted.
Every reserve district in the coun-
try held OH September IL, 1911. a large
surplus of cash over and above the
amount required TO be transferred 10
the reserve banks, plus the amount
required to he retained in vault under
the act. There can. therefore. be 10
difficulty in making transfers of cash
Possibility of disturbance and incon-
vcnience lies in member banks maxi
ing demands upon their correspond
ents 10 make these transfers for them,
and in concentrating these demands
upon one place or section.
1t is, therefore. again earnestly re-
u,lnSf that trrpgf.rG IA. mud. Il. ..,,i,