The Washington herald., 1914-04-03
richmond GETS
RESERVE BANK

| CONTINUED FROM PAGE ONE
which now runs to New York. Chicago,
and St Louis and send it into new and
untried channels OF activity. Neverthe-
less in defining these channels the law
requires that the committees work shall
be done with due regard to the customary
course OF trade and exchange.
Work Well Done.
In seeking a solution of this difficult
| problem, the committee was forced 10
consider the country as a whole and IL
] could not give special consideration to
| any one section or favor one city at the
expense Of another. Therefore, in the
face of many complexities and numerous
| contending interests. the work OF outlin-
ing Federal reserve districts and designat-
ing the cities has been well done.
The successful operation of the law will
depend on the personnel OF the Federal
Reserve Board. the question of whether
| the cities are properly distributed and
| the degree of cooperation between the
| Federal Reserve Board and member
banks.
II the membership Of the board. in ad-
dition to Secretary McAdoo and Comp
troller Williams. embraces such men as
George Z. Roberts and Jacob II. Schiff.
men of tested knowledge and broad ex
perience. they will be able to make the
system successful from the start.
The powers of the Federal Reserve
Board are far more important than the
, trainers of the act believed.
Including the twelve duties and powers
set forth in Section II and numerous
other powers mentioned elsewhere in the
law, the Federal Reserve Board possesses
flfty-three powers. many Of which cover
unimportant and routine matters. Others,
however. are vital and far-reaching in
their effect on the system. They may
he divided broadly under six heads: Or
ganiation. redIscounts. note issues. con-
troll over reserve banks. control over
member banks. and miscellaneous.
These powers set forth in detail ap
pear as follows:
ORGANIZATION.
l. Readjust districts created by the or
ganization committee and create new
ones up to a maximum total Of twelve.
.. Call for payments Of stock subscrip
tions.
2. Compel, at its discretion, any ma
tional bank to cease TO act as a reserve
agent il such bank fails to accept the
terms of the act prior to February q.
1914
T. Direct dissolution proceedings against
any national bank failing to become a
member or otherwise to comply with pro-
visions of the act before December ..
1914
5. Adopt and promulgate rules and
regulations governing the transfer OF
stock of the Federal reserve banks.
s Approve the rules and regulations
governing the operation OF branches OF
the reserve banks. and TO appoint. with
power of removal. three OF the seven
directors for each of these branches
:. Designate three of the nine direc-
tors OF each reserve bank. specifying one
as chairman and Federal reserve agent
and one as deputy Federal reserve I
agent" The reserve board also shall fix
the compensation OF the Federal reserve
agent. and must approve the Compensa-
ton provided by the boards Of directors
of the reserve banks for directors, Of /
ficers and employees.
S. Receive applications for member |
ship from State banks and trust COM /
panies and decide upon rules and reg |
ulations governing their admission. sub |
ject to the provisions of the act.
REDIsCOUNTS.
Q. Supervise under the law the ex-
tension to member banks Of discounts,
and accommodations.
IN. Permit, or on the vote at at least
five members. require one reserve bank
to rediscOunt the discounted paper of
another at a rate OF interest to be fixed
by the board.
II. Determine or define Csubject to stip-
ulations in the act) the character Of pa
per eligible for discount by member
banks.
II. Limit the amount of redscounts on
paper drawn for agricultural purposes or
based on live stock and with a maturity
not exceeding six months. to a percent
age of the capital OF the reserve bank
to which application for the rediscount
is made.
u. Impose restrictions limitations and
regulations upon rediscounts by the re-
serve banks.
Il. Review and determine the rate Of
discount to be charged by the reserve
banks for each class OF paper.
NOTE ISSUES.
Is. Authorize. supervise. and regulate
the issue and retirement of Federal re-
serve notes.
1s Receive through the Federal reserve
agents applications for Federal reserve
notes. and at its discretion grant. in 4
whole or in part. or reject entirely such
applications.
II. Require the deposit with the Fed
eral reserve agent Of an amount of COL
lateral equal to the notes thus applied
for and issued. Additional collateral may
At any time be required to protect the l
notes already issued.
Is. Assign to each reserve bank a dis
tinctive letter and serial number by
which the notes issued to il may be {
Identified
19. Require each reserve bank to main
tain in the Treasury of the United States
l redemption fund in gold against the |
reserve notes issued to IT,
20. Establish the rate of. interest to be I
paid by each reserve bank for the notes
t receives, and upon the request Of the
of the Treasury require each
-eserve agent to transmit to the Treas /
Try of the United States so much as may
De required of the gold reserve held
against the notes.
'ONTROL OVER RESERVE BANKS.
q. Levy semi-anaual assessments upon ,
he reserve banks for its estimated ex-
lenses during the succeeding six months, I
ogether with any deficit carried for r
ward.
% Examine. at its discretion. the ac- Z
cunts, books. and affairs OF each re- !
erve bank and of each member bank !
md require such statements and reports Z
Is it shall deem necessary.
3. Suspend or remove any officer or
irector of any reserve bank for cause
tated to the official removed and to the
aid reserve bank.
"a. Require the writing of of doubtful 7
r worthless assets upon the books /
nd balance sheets of reserve banks +
q. Suspend any reserve bank for vio- a