Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-19

serve bank. to he fixed by the Federal
reserve bond
1T is also provided that q member
bank not located in a central reserve
city may make loans secured by farm
lands for time not longer than five
years aud for an amount not exceeding
80 per cent of the actual value of the
property and for an amount not to ex-
coed % per cent of Inc capita. and sur
plus, or one-third of the time deposits
of such bank making the loans,
Amended Vreeiand Bill.
We realized in the Senate that a con-
siderable portion of the present year
would he required TO organize and to
put into effective service the Federal
reserve banks. It was apparent last
| fall that loans were being contracted on
account of the belief that pending the
complete organization of the Federal re
serve banks the subscription by mem
Der banks to the capital stock and the
transfer OF reserves to the Federal re-
serve banks would lessen the amount OF
currency at the command of the banks
To avoid this trouble we amended the
Nreeland- Aldrich act. As passed in 1908
and as It stood upon the statute books
while 1t provided for the loan to bank
| ing associations of $500, 00O, 900 of notes
| the tax placed upon the loans was sc
| heavy, reaching In the fifth month 10
per cent. that the rate was almost pro-
hibitive.
we, therefore. reduced the rate OF
tax in the Nreeland- Aldrich act so that
the maximum rate would be & per cent
while the rate for the first six months
would average only about 3ia per cent
I per annum. This provision of the bank
| ing and currency act has greatly re-
lleVed an apprehension of enforced con
traction during the present wear, and as
| II will continue in force until July l.
| 1915, there need be no scarcity of cur
! renCy pending the complete organiza-
| ton OF the Federal reserve banks.
Under this amendment the use OF
| 500 by banking association for six
! months involves a tax OF only $l.75, II
! Is impossible, therefore. under such a
condition to have a currency stringency
| pending the organization Of the sys-
| tenn.
Approves New Measure.
| 81 do not hesitate to give my most
| cordial approval 10 the new law. 1t will
| prove a new freedom to the business of
J our country. 1t will prevent currency
/ pantcS, 1t viii safeguard against runs
upon banks, It will make the reserves
/ of banks available when needed. II
viii make currency elastic. II Will en-
| able banks to expand their business II
| viii facilitate the removal of money
! from a section in which it is not needed
| to a section in which il is needed,
| "Those who have objected to Govern
| ment supervision and control Of Fed
! eral reserve banks forgot that while the
! stock of the Bank of Germany and the
| Bank of France is owned by individuals
| the directors are designated by the Gov
! eminent and that while the stock OF
| the Bank Of England is privately owned,
| bankers. brokers and discounters Of bills
| are excluded from the board Of directors
! and the bank is really controlled by and
/ under law that amounts TO Government
| supervision equal 10 that provided by
| our banking and currency bill
| 1T is now perfectly evident that all
! the great national banks Of the country
! intend to avail themselves Of the priv
| ilege OF becoming members Of Federal
| Advises Bankers TO Join.
| II do not hesitate To advise state
| banks To take advantage OF the oppor-
! tuntty to become members Of a Federal
! reserve bank They viii only be re
| CURED to take from their assets 3 per
/ cent OF their capital stock and surplus
| TO be invested IN the stock OF the Fed
! eral reserve bank. They will receive 6
! per cent interest on the investmut. II
| they are disposed to complain that the
! law requires that a portion Of their re
/ serves he deposited with the Federal re-
| serve bank while thew now re-
| Ceivs . per cent interest in New York.
! J would reply that the money which the
| banks keep there on deposit is the mon
| ev OF their depositors. and the benefit
| that would come 20 the depositors and
| the local bank from having the deposit
| In Federal reserve hank would he
! GreAter than the per cent interest on