Fulton County tribune. (Wauseon, Ohio) 1883-1925, 1914-01-02

gional bank and of the government.
II the demand for currency in any
section of the country exceeds the
supply Of circulating money regional
bank can secure this new money
from the government and put 1T into
circulation; but gold reserve Of 40
per cent. and commercial paper equal
to the full value of the note must be
held as a reserve behind each note
issued
This provision is expected to be the
influence that will drive the new
money back into retirement when it
is no longer needed.
Clearly Explained.
The following analysis presents the
details Of the new law without ad-
herring closely to the technical division
or language of the measure:
At the head of the system withstand
a federal reserve board at Washing
ton, appointed by the president. and
to consist of the secretary OF the
treasury, the controller of the curren-
cy 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 con-
troll over the entire system.
The temporary Organization COM
mittee," or the federal reserve board.
will select from eight to twelve cities
where regional reserve banks shall be
located and will divide the entire
country geographically with these
cities as the centers Of districts. All
national banks in district will be
required to subscribe for the stock of
the regional reserve bank in that dis
trict and to keep portion of their
reserve there.
Known as s.Member Banks
Local banks will be known as mem
ber banks" because they will own the
stock of the regional reserve bank
Of their district. Each member bank
will be required to take capital stock
of the regional reserve bank, equal to
per cent. of the member banks capi-
tai and surplus. The capital of the re-
gional bank will increase or decrease
so that it always represents per
cent. of the combined capital and sur
plus of all the banks of the district
that have Joined the system.
National banks are compelled to
join and state banks are permitted to
If they bring their reserve require
ments up to the standard set for ma
tional banks and submit to national
examination.
Public Can Buy Stock.
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 for $4,000,000. In such event the
public may purchase the stock in
quantities limited to $25.000 for each
individual, but the voting OF this stock
will be placed in the hands of govern
ment representatives on the board OF
directors of the regional reserve bank
The regional reserve bank may dc
business only with their member
banks, not with the public, except that
certain open market operations such
as the purchase and sale of gold, gov
ernment or municinal honds> and Ger.
tain forms ~ hills sof exchange are
permitted These banks will make
their earnings from the loans made to
member banks, and from the purchase
and sala ~ honds and foreign hills ot
avcharva
Mu.4 p.v liz c..h
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e1 = = p ...aSs,,ss,.s ss
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the large cities, the law provides ina