Saturday news. (Watertown, S.D.) 19??-19??, 1914-01-01
CURRENCY LAW MOST FAR-REACIIING
FINANCE MEASURE in MANY YEARS
Reserve Required.

Country banks: Total reserve re-
quired, IL per cent of demand deposits
and per cent of time deposits.
FYye-twelfths must be kept in the
banks vaults for two years and foun
twelfths after that time. For the first
year two-thirds must be kept in the
regional bank, increasing one-twelfth
each six months thereafter until 1t
reaches five-twelfths Of the total re-
serve. For three years the unallotted
part of the reserves may be kept in
the banks of reserve cities; after that
time it must be kept either in the
country banks vaults or in the re-
gional reserve bank.
City Banks Reserve.
Reserve city banks: Total reserve
required, 10 per cent OF demand and 5
per cent of time deposits. Six-fifteen-
this must be kept in the banks vaults
for the first two years, and five fif-
teenths after that time. Three-fifteen-
tbs must be kept in the regional re-
serve bank for the first year increas-
ing one-dfteenth every six months
thereafter until it reaches six-ffteen-
tbs. For three years the unallotted
portion of the reserve may be kept
in other banks, in its own vaults or
in the regional reserve banks and the
in one of the latter two places.
Central reserve city banks (New
York, Chicago and st. Louis): Total
reserve required, IS per cent of de-
mand and per cent of time deposits
Board Names Directors.
Six-eighteenths must be kept in the
banks own vaults; seven-eighteenth
in the ergional reserve banks and the
remaining five-eighteenths in either
place the bank may choose. M
These immense funds of reserves
from Misunderstanding together with
government moneys, will make up the
deposits of the regional reserve banks
Each of these banks will be admins
tered by board of nine directors, six
of whom will be elected by the banks
and three appointed by the federal
reserve board.
May Re-discount Paper.
The regional reserve banks may re-
discount-that is, buy at discount
from its member-banks-"prime COM
merdial paper when the member
banks desire to convert these assets
into money. The exact terms Of this
important provision as to the charac-
ter of paper upon which the regional
reserve banks may furnish cash are
as follows:
Upen the Endorsement of any Of
its member-banks, with a waiver Of
demand notice and protest by such
bank, any federal tregionaD reserve
bank may discount notes, drafts and
bills of exchange arising out Of act
ual commercial transactions; that is,
notes, drafts and bills of exchange is
sued or drawn from agricultural, in
dustrial or commercial purposes, or
the proceeds of which have been used
or are to be used, for such purposes,
the federal reserve board to have the
right to determine or define the char
acter of the paper thus eligible for
discount, within the meaning of this
act
Must Have Security.
Nothing in this act contained shall
be construed to prohibit notes, drafts
and bills of exchange, secured by
staple agricultural products, or other,
goods, wares or merchandise from be.
ing eligible for such discount; but
such definition shall not include notes.
drafts or bills covering merely invest.
ments or issued or drawn for the pur-
pose OF carrying or trading in stocks,
bonds or other investment securities,
except bonds and notes Of the govern
ment Of the United States.
Notes, drafts and bills admitted to
discount under the terms of this para
graph must have a maturity at the
time Of discount Of not more than
ninety days: Provided, that notes.
1rafts and bills drawn or issued for
agricultural purposes or based on live
stock and having maturity not ex-
seedfng six months may be discounted
n an amount to be limited to per.
'entage Of the capital Of the federal
,regiona) reserve bank, to be ascer-l
aimed and fixed by the federal re-
'erve bank
Continued on Page 81