Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1914-12-02
RATE FOR
RESERVE BANK REDUCED
New Schedule Takes Efrcc- -1o-Day.
and Will Increase Volume
of Business.
RESERVES NOW WELL IN HAND
System Has Relieved Financial Strain
to Marked Degree, Says Governor
George j. Seay-Demand for Credit
Had Been Overestimated.

beginning to-day the Federal Re
serve Bank OF Richmond will put into
effect the reduced rediscount rate of
IL per cent for thirty-day maturi-
ties, and 6 per cent for all other ma
turtles. The rates that have been in
force since tho opening of the bank
have been 6 and 6 1-2 per cent, respcc-
lively.
The reduction in the rediscount rate
for the Fifth District was authorized
by tho Federal Reserve Board at the
tors OF the Federal Reserve Bank of
Richmond. 1t will have the effect OF
encouraging the rediscounting of COM
Under the old per cent rate redis-
counting was resorted to infrequently,
since the operation carried practically
no profit to the bank applying for this
service.
REDISCOUNTING DISCOURAGED
UNTIL RESERVES WE'RE PAID
The rediscount rate was purposely
at the approximate discount rate ut
first IN order TO discourage II too free
exercise of this function until tho first
installment of the reserves We're in
hand and the banks had had an op-
portunity to feel out the demand. Now
that the reserve payments for the year
are practically complete. the reserve
banks VIII begin rcdiscounting opera
tons in earnest. and the reduction OF
the rate is n preliminary step in this
direction.
nor The o pen Of the Federal reserve
Of the. local institution, yesterday,
has relieved tho financial strain to a
married. ma, degree. The mere fact that
fail back upon the reserve bank in
case of need has tended to ease the
loan market. The demand for credit,
1t appears has been q good deal over
estimated"
The Federal Reserve Bank of Rich
mond has rediscounted to date moro
paper Most OF the applications for
rediscount.. said Governor Seay, have
como from the cotton-producing sec
tons. Practically no rediscountinG
has been done for Richmond banks
PREPARING TO UNDERTAKE
CLEARINGHOUSE WORK.
WASHINGTON, December 1.-The
Federal Reserve Board tonight gave
the Federal Reserve Bank at Kansas
City authority TO clear checks by mem
be given Immediately to the Chicago
bank. This is the first step taken to-
ward having reserve banks exercise
new currency law.
In its telegram to Federal Reserve
Agent Miller, mt Kansas City. the board
meeting of the governors OF all reserve
banks is TO be held here December
S-lU, 3t Wnlcn clearing OF checks Will
be considered. 1t is the hope of mem
bers of the board that ultimately a
large part of the clearings of the coun-
try will be done through the reserve
bank.
Itediscouuts by the twelve banks
have not increased materially in the
last few days. but there has been an
Increase I'm the amount Of Federal re-
serve notes taken by member banks.
3 The increase in Federal reserve notes
may be accounted for by q, decrease
in clearing house loan certificates and
emergency currency announced to-
night by Comptrollcr OF the Currcncy.
Williams. According to Air. Williams.
all clearinghouse certificates have
hecn paid off Or called in for redemp-
ton. The total amount of emergency
currency issued by the Treasury De-
partment, MI. Williams said. was SSSI, :
redeemed. Tho gradual disappearance
OF emergency currency is presumed to
be due to the fact that banks are
anxious TO take out Federal reserve
notes.