The Delta independent., 1914-02-13
WESTERN SLOPE BANKER :
DISCUSSES REGIoNALS S

C. c. Parks, of Glenwood, had the
following article in a recent number
of the Pueblo Chieftain, containing
his views on the new banking law and
regional banks:
The federal reserve act provedes
there shall be not less than eight, nor
more than twelve regional banks. AS
speedily as possible the act will be
put into operation and the banking
system which has been in force for
about one-half a century will undergo
a radical change. How that change
will affect the people generally is
matter of interest to all. The United
states has grown so rich and power
full under the present laws that there
is a natural reluctance to change.
That reluctance is especially notice
able among bankers now operating
under the national banking laws. But
careful study of the new act is rapidly
convincing bankers that the new law
will be of benefit both to the people
and the banks.
Colorado will be embraced in the
territory of one of the regional banks
and in every probability Denver will
--be selected as the location of the re-
gional bank for the entire Rocky
Mountain region The regional bank
must have capital of not less than
four milliin dollars. The national
banks, if they are to continue the
system, must subscribe for stock of
the regional bank in an amount equal
to s per cent of the capital and sur
plus. Provided this does not make
the required capital any individual.
co-partnership or corporation can sub
scribe in an amount not exceeding
$25, 1000, and if this still leaves the
capital deficient the United States
takes the remainder. The dividend
rate is limited to per cent per an
mum, but the dividends are made up
in succeeding years. The law pro-
vides that each federal reserve bank
shall establish branch banks within
the federal reserve district in which
it is located" 1t is worthy of note
that the laws says "shall' and not
may" so that any city having large
financial interests may reasonably
hope to have a branch established in
their midst. Pueblo, serving large
territory, should have such branch.
The principal object of the federal
reserve law is to make an elastic cur
rency, and to distribute reserves over
the entire country, instead of concen-
tlating them in New York City, as is
the tendency under present conditions.
Under present laws, in times of stress
or panic, the tendency of all banks IS
to call loans, instead of expanding
them according to the needs of their
customers, with the result that when
money is most needed it is hardest to
get Money goes into hiding, reduc-
ing the available supply.
Our currency system, being rigid,
affords no relief, and every bank looks
out for itself. Under the federal re-
serve law federal reserve notes in cur
rency, can be issued at the discretion
of federal reserve board for the pur-
pose of making advances to banks
within the system. A bank, under GER
tain limitations and having approved
collateral, can always get currency.
The law provides that each federal
reserve bank shall extend to each
member bank such discounts, advance
mcnts and accommodations as may be
safely and reasonably made with due
regard to the claims and demands oe
other member banks" Under these
conditions the supply of currency
should always be sufficient for the
needs of the country But the law is