Barton County democrat., 1914-11-20

NEXT 10 Tie elasticity Ol TIE H"W
currency, officials value the mo
bilization" of reserves which it
will insure. This. they point out,
does not mean the concentration
of vast sums from country banks
in reserve cities as under the ma
tional banking act, but their ap-
pearance in large part on the debit
banks in widely scattered parts OF
the country. These reserves will
be as near as possible to the door
of the member bank to which
they belong in times of need and
there can be no refusal from a re-
serve bank to return them in cases
of eXigency.
A remnant of the present SyS-
tenn still remains in the provision
by which banks may keep a GER
tain proportion of their reserves
with other member banks in
cities now known as reserve and
central reserve cities. AT the end
of three years, however, that will
be changed and all reserves will
be held either in a banks own
vaults or with a federal bank.
An effort was made in. congress
a few weeks ago to permit mem
ber banks to deposit all their re-
serves with their reserve bank al
once. As the law stands, their
process is to be spread over a per-
lOd OF thirty months. If it is re-
newed successfully next winter
1t will mean a marked increase in
The available funds of the reserve
banks. AS it stands, the twelve
banks will start out with a total
cash reserve of about $243,OO0, 600
Another point not forgotten BY
admirers of the law is the fact thai
will release about S464,OOO,OOC
the different reserve requirements
now tied up in reserves and will
Tor borrower to get hearine
and a loan.
The reserve banks are moi to dc
a banking business except with
member banks. They are EN-.
powered, however, to engage ir
open market transactions in the
buying or selling of cable trans,
ferS and bankers bills of accep.
tanceS and bills of exchange
Other transactions include buyin.
and selling of bonds or notes Of
the United States, paper issued ir
anticipation of the collection Of
lakes or assured revenues of anN
state or political subdivision ir
The continental United States. ThC
banks are to establish, subject tC
approval of the reserve board
rates of discount to be charged
for each class of paper. They NAV
also, with the boards consent
open and maintain banking ac.
counts in foreign countries fol
The purchase or collection of bill,
of exchange.
In the future the clearings o.
The banks of the country are ex
pected to be made through these
regional banks, which may in time
clearing house associations. Clear
ingS which involve banks in wide
ly separated parts of The country
probably will be made with mucl
greater rapidity through the new
banks than through ordinary
commercial channels. 1t has beer
estimated that through this Savin!
in time alone, the use of hundred.
of millions of dollars for many
days will be saved.
In time, the new system will re
tire the 2 per cent United State.
bonds now used principally as
basis for national bank notes
There are more than $700,000,0OI
of those bonds now outStandin,
and their retirement is 10 b,
spread over a period of twe1t,
years, With their passing the ma
tional bank circulation based up
on them and not upon the lif
beats of commerce will diSappea
and unless by that time congreS
has enacted a new act, the natiol
will have a currency that in the
ory at least responds to hegrowtl
of crops, the throb of industria
plants and the progress of the bus
mess world.
Miss Edna Powell returned t
| hnr h.. :. HIT..L.l IL LII