Semi-weekly herald. [volume] (Durango, Colo.) 1907-1917, 1914-01-22


will have the additional advantage Of
issuing a greater amount Of cur
rency than the capital stock Of the
reserve bank. The currency issued by
the reserve bank will be redeemable
in gold, and will be backed by the
federal government.
Chairman VIII Be Federal Reserve
Agent
AS we have said, the Federal Re-
serve bank Of Chicago will be in
charge of a board Of directors con-
sistine of nine members. One direc-
tor will be chosen chairman, and he
will be called "Federal Reserve
agent" He must have had banking
experience. He must make regular
reports to the federal reserve board
He is to be paid a salary fixed by
the Federal Reserve board. Another
director is to be chosen deputy chair
man and deputy federal reserve
agent. Directors of federal reserve
banks must be paid salaries, also be
paid for attending meetings Of the
federal reserve board.
What is Member" Bank?
A "member" bank is national or
state bank which has subscribed 70
the federal reserve bank in the dis
trict where it is located. Des Moines
will have several "member" banks.
The three national banks have al
ready resolved to subscribe their part
Of the stock. Several state banks
viii doubtless do the same, A mem
Der" bank will correspond with what
in banking is now called Correspond
cnt."
State banks may retain their state
charters. but must pay in toward the
capital stock of the Federal Reserve
bank at Chicago.
Federal Reserve Board Has Seven
Members.
The entire system created by the
new act shall be in charge Of what is
called a Federal Reserve Board
consisting Of seven members, includ-
ing the secretary of the treasury and
the comptroller of the currency; the
ether five members to be appointed
by the president, with the consent of
the senate. The members Of thu
federal reserve board shall receive
s12, 900 per year. Their authority 8
practically supreme over all the re
serve banks, whether there shall be
eight or twelve.
Powers of Federal Reserve Bank.
The reserve banks in districts may
receive deposits from member
hanks and from other reserve banks
and from the United States; may dis
.onnt the notes Of member bank
growing out of regular commercia
transactions. All of the funds %
the United States treasury may be
deposited in the federal reserve banks
excepting 5 per cent retained for re-
demption fund The Federal Reserve
board may issue reserve notes 20 re-
serve banks, which shall be redeem
Bile in gold or lawful money at re-
serve banks.
Federal Reserve Banks May Issue
Money.
A "member" bank may secure led
real reserve bank notes for circulation
by taking regular commercial paper
TO the federal reserve bank for re-
discount. A system is adopted which
authorizes the issuance of currency
in response to the demands of trade
to be taxed out of existence when the
purpose for which the issue was
made has been accomplished.
Retiring the Two Per Cent Bonds.
When a national bank wishes to
retire from business, or to change to
another form of bank, such bank can
sell its 2 per cent bonds to the federal
reserve board, and the federal reserve
banks are required TO purchase such
bonds to the amount of S25,OOO,OO0
per year. The government is auth
orized to issue one-year gold notes
for outstanding per cent bonds, such
notes to bear per cent interest, and
these shall be redeemable in govern
ment per cent thirty-year bonds.
The thirty-year bonds cannot be used
as basis for currency.
Gold Standard to be Preserved.
The gold standard is, by section 20,
specially preserved.
Old Temporary Emergency Powers.
The provision formerly made by
congress for the issue of emergency
currency is extended to June 30, 1915.
Farm Loans Provided for.
The matter of making farm loans
has been hbcraized, and under the
new law any national bank not sit
uated in central reserve city may
make loans on farm lands for a per
iod not longer than five years, and
for an amount not exceeding 80 Per
cent of the value of property.
Member Banks 80 be Examined.
The comptroller of the currency is
authorized to require examinations of