Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1914-01-09

Tho regional BANKS may also dis
count ''acceptances hased on The Inn
~portation or expectation OF goods"
The new treasury notes, which are
to furnish the elastic element In the
currency, system n to add to b
country.s circulating money In time OF
need. will come Into use In the follow.
ing ways:
The notes will be printed by the gov
eminent with q distinctive style for
each regional reserve bank. Ono Of
the three directors named by the fed
era! reserve board for each regional
bank will be known as the federal re-
serve agent" for that bank. and q sup
ply OF the notes will be placed in his
custody.
Should a regional bank desire to pay
out more money than its cash re-
sources will permit. the law provides
mat 1T may put some Of Its r~ediscount-
OF the federal reserve agent" and re-
ceiVe In return the new treasury notes
For each note that it puts out Of CIR
culation the regional reserve bank
u set aside in gold 20 per cent OF
the value OF the note. an a guarantee
for Its redemption.
This gold. with the commercial pa.
per neld by the federal reserve agent"
is the protection behind tho new
money: but those notes will also b.
guaranteed by the government and
may be redeemed in gold at the United
States treasury.
Each regional bank. under the act
the deposits 1t has received. besides the
40 per cent gold reserve behind the
treasury notes it issues. II che
DC reserve behind tho notes
Ialls below 40 per cent .
heavy tax is imposed on the bank
which In fNN~u r1s1a HHD a. a. ~ ~~k>
1t charges member banks for redis.
counts. This was designed to stop an
over expansion Of currency. In times
OF sudden stress the federal reserve
board can revise those provisions in
order to furnish quick relief to any
community.
No regional bank can again pay out
OF the notes Of another except under .
heavy tax. These notes are expected
to return to the regional banks and be
Withdrawn from circulation when the
need for their uses passes.
None Of the existing forms of cur.
rency except the national bank notes
VIII be disturbed by the new law.
The United States bonds now used to
secure the issue of bank notes are to b.
taken up at the rate OF $4,000, 900 Q
year by the regional reserve banks and
new treasury notes or short term 3 per
cent bonds will take their place. Ma
tional bank currency is expected grad
ually to retire.
The federal reserve board will exer-
else final control yer the entire opera
ton OF the system. 1t can compel one
regional bank to loan to another In
time OF need; can suspend all restric.
lions surrounding the reserves which
regional banks must hold, and can re-
move directors Of regional reserve
banks whenever 1t Is belle we'd neco0.
sary.
While the banks retain control of the
boards of the regional reserve banks,
their connection with the, federal re-
serve board Is only through an ad.
visory council. made up Of ono repre-
sentative from each federal reserve
district. This council will meet In
Washington to confer with the federal
reserve boar ION general business
conditions" and to make recommends
lions and suggestions concerning die.
count rates. note issues and reserve
conditions.
An important change in national
banking methods. embraced in the now
law. will permit all national banka
except those in New York, Chicago
and st. Louis. to make direct loans on
hve-year farm mortgages. up to % per
cent OF their capital and surplus. or up
to one-third Of their time deposits
Another provisions In the law permits
national banks having a capital of 81
100000 or moro to open foreign
branches. Similar authority is given
to tho regional reserve banks, the pur
pose being to facilitate the develop
ment of American trade abroad.