The Tabor independent. [volume] (Tabor, S.D.) 1913-19??, 1914-01-01

The regional banks may also ais
count s'a-cceptancea bh9ed on the ina
portation or expectation Of goods"
The new treasury notes. which ara
TO furnish the elastic element In The
currency system and to add to the
countryis circulating money In time Of
need, win come into use In the follow
ing ways:
The notes will be printed by the gov
eminent with a distinctive style for
each regional reserve bank. One o.
the three directors named by the fed
eral reserve board for each regional
bank Will be known as the federal re-
serve agent for that bank. and a sup
ply OF the notea viii 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
that Il may put some OF It's ~redisconnt-
ed commercial paper into the hands
OF the federal reserve agent" and re-
IceiYe In return the new treasury notes
For each note that IL puts u OF cir
culation the regional reserye bank
must set aside In gold 40 per. cent OF
the value OF the note. az a guarantees
for Its redemption.
This gold. with the commercial pa
per held by the federal reserve agent"
Is the protection behind the new
lIADllGJ Ns uuL ElOAA HOAEN Will AADV Nv
guaranteed by the government and
may be redeemed IN gold ct the United
States treasury.
Each regional bank, under the act,
must keep q reserve OF 35 per cent OF
the deposits IL has received, besides the
40 per cent gold reserve behind the
treasury notes 1t issues. If the
falls below 40 per cent 4
heavy tax IL imposed on the bank.
which In turn adds the tax 70 the rate
III Charges member banks for redfs-
counts This was designed 20 stop an
over expansion OF currency. In times
OF sudden stress the federal reserve
board car 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 q
heavy AK These notes are expected
to return 70 the regional banks and be
withdrawn from circulation when the
need for their uses passes.
None fofythe existing forms OF cur
.rency except the national bank notes
Will be disturbed by the new law,
The United States bonds now used to
secure the Issue Of bank notes are TO bS
taken UP at the rate of $25.000,000 g
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 win exer-
else final control over the entire opera
ton Of the system. IT can compel n
regional bank 70 loan 20 another In
time OF need; a suspend all restrie-
lions surrounding the reserves which
regional banks must hold, and can re-
move directors OF regional reserve
banks whenever II is believed neces-
|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-
.yisory council, made up OF one repre-
sentative from each federal reserve
district. This council will meet In.
Washington to confer with the federal
reserve board ION general business
conditions" and to make recommends
.tions and suggestions concerning dis
count rates. note issues n reserve
conditions.
An important change In national
banking methods, embraced in the new
law, viii permit IN national banks,
except those In New York, Chicago
and st Louis, to make direct loans on
.hve-year farm mortgages. up TO rs per
cent OF their capital and surplus. or up
Ito one-third OF their time deposits.
Another provisions In the law permits
national banks having a capital OF ST.
.ge0, 900 OF more to open foreign
branches. Similar authority Is given.
to the regional reserve banks, the pEr-
pose being TO facilitate the develop
ment of American trade abroad.