The Yale expositor., 1914-01-01

The amount Of reserve required
from every bank under the new law,
and the place where it must be kept,
are as follows:
Country banks-Total reserve requir-
ed, ~ per cent. of demand deposits
and per cent. of time deposits. Five
twelfths must be held in the banks
own vaults for two years and four
twelfths after that. For the first year
two-twelfths must be kept in the re-
gional bank, increasing one-twelfth
each six months thereafter until 1t
reaches five-twelfths of the total re-
serve. For three years the unallotted
part of the reserve may be kept in
the banks of reserve cities. After
that line it must be kept either in
the country banks and vaults or in the
regional reserve bank.
Reserve city banks-Total reserve
required, 10 per cent. of demand and
per cent. of time deposits. Six-fif-
teenths must be kept in the banks
vaults for the first two years and five
fifteenths after that time. Three-fif-
teenths must be kept in the regional
reserve bank for the first year, III
creasing one-fifteenth every six
months thereafter until it reaches six
fifteenths. For three years the un-
allotted portion of the reserve may be
kept in other banks, in it's own
vaults, or in the regional bank; after
that time in one of the latter two
places.
Central reserve city banks New
York, Chicago and st. Louis)-Total
reserve required, Is per cent. of de-
mand and per cent. of time depos-
it's. Seven-eighteenths in the regional
reserve banks and the remaining five
eighteenths in either place the bank
may choose.
Regional Reserve Banks.
These immense funds of reserves
from member banks" together with
government moneys, will make up the
deposits Of the regional reserve banks.
Each of these banks will be admins
tered by board of nine directors, six
of whom will be elected by the banks,
and three appointed by the federal re-
serve board.
The regional reserve banks may re-
district-that is, buy at a discount
from its member banks-"prime COM
mercial paper" when the member
banks desire to convert these assets
into money.
Character of Paper.
The exact terms of this important
provision as to the character of paper
upon which the regional reserve banks
may furnish cash are as follows:
Upon the Endorsement OF any of it's
member banks, with a waiver of de-
mand notice and protest by such
banks, and federal (regionaD reserve
bank may discount notes, drafts, and
bills of exchange arising out of act
ual commercial transactions; that is,
notes, drafts, and bills of exchange is
sued or drawn for agricultural, indus
trial or commercial purposes. or the
proceeds of which have been used, or
are to be used. for such purposes, the
federal reserve board to have the
TlBnI 10 uSleTHlne OF ueHne the CudT-
acter OF the paper thus eligible for
discount, within the meaning of this
act.
Eligible for Discount
Nothing in this act contained shall
be construed to prohibit such notes,
drafts and bills of exchange, secured
by staple agricultural products, or 9th
er goods, wares, or merchandise, from
being eligible for such discount; but
such definition shall not include notes,
drafts, or bills covering merely invest
ments or issued or drawn for the
purpose of carrying or trading in
stocks, bonds or other investment sc.
curities. except bonds and notes of the
government of the United States
Notes, drafts and bills admitted to
discount under the terms of the para
graph must have a maturity at the
time of discount of not more than 80