The central record. (Lancaster, Ky.) 18??-current, 1914-04-09
LOUISVILLE LOSES
IN STRUGGLE FOR REGIONAL
BANK
Kentucky To Be In Cleveland And St.
Louis District.


Louis District.
Louisville lost in her efforts to get one of
the newly established" Regional Banks"
the eartern portion of the state being
assigned to the Cleveland district while
the remainder of the state was assign
ed to the st Louis district. The official
announcement locates the boundary in
so far as this particular locality is con-
cerned as follows East of the western
boundaries CT the counties of Boone,
Grant, Scott, Woodford, Jessamine,
GARRARD, Lincoln, Pulaski and Nc
Creary. This location is supposed to
have been made because of the direct
ION of the natural trend of business,
that in this locality having tendency
toward Cleveland as against st Louis,
while the territory of the state west of
the Q & c railroad in inclined toward
Louisville and ST Louis. While Ken
lucky mas no direct interests of bust
ness character worthy of mention, it is
understood that a branch Regional
| Bank will be established in Cincinnati
| for the accommodation of this section
of country, which to all intents and
purposes would serve the same purpose
as If Cincinnati had secured one of the
p,ucb Snuobt lOcatiopC II - aIcO hi oh
! ly probable that branch institution
will be established in Louisville 20 ac-
cOmmodate that part of the territory
which is in the st Louis district, and
which be of equal advantage to the
latter city.
Of the Cleveland district, including
Eastern Kentucky. the Reserve Com
mittee has issued the following
statistics:
Area, 1913. 995 square miles.
Population, 1861 ,022.
Number of national banks, 724.
Capital and surplus, 1892, l47, 25S.
Six per cent subscription, Sll, 52S, S35
|
banks and trust companies, $11 .621, S35.
This membership will mean the in
vestment of about 500, 900 by Lexing-
ton banks III the Cleveland Reserve
Bank, and in return receives the pro-
lection and banking facilities afforded
by the unity of over seven hundred
other banks.
The largest district is that of New
York with AIS national banks as men,
bers and with capital of over twenty
millions. The next largest is the
Chicago bank with thirteen millions
capital and nearly thousand member
banks, The Philadelphia bank with
$l2. 900, 900 capital and 800 members is
third in size and the Cleveland bank
fourth.
According to law passed at the last
session of the General Assembly. State
banks may take stock in the regional
banks, but are not required to do so.
They will be admitted to membership
upon application, but only upon the
same terms as National banks, that is,
by subscribing to the stock of the re-
serve bank to the extent of six pei
cent of their capital and surplus.
The purpose of the reserve banks is
to provide bank which will advance
money to local banks by redscounting
commercial paper. and will also serve
as the approved reserve agents for the
various local banks.
Heretofore the national banks all
over the country have kept large part
of their reserve with their correspond
ents in New York. and when it became
necessary for them to rediscount CON-
mercial notes, also went to New York
for their money.
The regional bank system consequent
ly takes from New York vast amount
of its financial power, and distributes
it in regional banks, of which the banks
themselves are the stockholders, SC
that in measure they will draw divi-
dends from the banks in which their
reserve is deposited and from which in
times of stress they borrow money.
One of the greatest benefits of the
regional system is expected to prove
itself by making panics impossible.
Should pressure for money become
so heavy that the reginal bank cannot
meet it, it may go to the other reserve
banks for relief, and will naturally go
to those sections where money at the
time Is easy, thus averting the present
mighty ebb and flow of money in and
out of New York at recurrent periods
every year. The failure of New York
to supply as much as is needed at criti-
Cal moments has been one of the caus-
es OF panics III previous years.
One region is prevented from taking
advantage of the necessity of another
by a limit of six per cent dividends.
Earnings to certain amount above
this SO to the surplus fund, and above
this mark, the excess earnings must be
paid into the United Sta ties Treasury.
| AnlJnT