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

serve bank. to be fixed by the Federal
reserve bond
1T is also provided that a member
bank not located in central reserve
city may make loans secured by farm
lands for time not longer than five
years and for an amount not exceeding
90 per cent of the actual value of the
property and for an amount not to ex-
coed % per cent of the 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 be required to organize and to
put INTO effective service the Federal
reserve banks 1t 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,
ITO avoid this trouble we amended the
Nreeland- Aldrtch act. As passed In 1908,
and as II stood upon the statute books
While II provided for the loan to bank
ing associations of $500, 900 600 OF notes
the tax placed upon the loans was So
heavy, reaching in the fifth month Ia
per cent, that the rate was almost pro-
hihitive
We. therefore reduced the rate of
tax III the Nreeland- AldriCh act so that
the maximum rate would be 8 per cent
while the rate for the first six months
would average onlN about 30 per cent
per annum This provision of the bank
ing and currency act has greatly re-
leNed an apprehension of enforced con-
traction during the present year, and as
It Will continue in force until July /,
1918, there need he no scarcity OF cur
rency pending the complete organiza
n al h44,,
Under this amendment the use of
500 by banking association for six
months Involves tax of only Sl.75. II
Is impossible, therefore, under such a
condition to have a currency stringenCy
pending the organization OF the sys-
tenn
Approves New Measure.
Il do not hesitate to give my most
| cordial approval TO the new law. 1t will
prove new freedom to the business OF
| our country 1t will prevent currency
panics, II will safeguard against runs
upon banks II will make the reserves
OF banks available when needed. 1t
will make currency elastic II will en-
able banks to expand their business. II
Will facilitate the removal of money
from a section in which il is not needed
TO a section in which II is needed.
Those who have objected to Govern
ment supervision and control Of Fed
| cral 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 disCouuters 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 to that provided by
our banking and currency bill.
1T is now perfectly evident that az
the great national banks Of the country
| intend To avail themselves OF the priv.
| ilege Of becoming members of Federal
Advises Bankers to Join.
Il dc not hesitate TO advise State
| banks to take advantage OF the Oppor-
| ,untiy TO become members Of a Federal
| reserve bank. They viii only be re-
! CURED To take from their assets per
cent of their capital stock and surplus
| Go be Invested In the stock ot the Fed
eral reserve bank They will receive 6
] per cent interest ON the inveStmut II
! they are disposed 20 complain that the
law requires that portion OF their re-
serves be deposited with the Federal re-
serve bank while they now re-
ceivc per cont interest in New York.
| would reply that ne money which the
| banks Keen there ON deposit is the mon
sN nf their depusitOrS. and the benefit
I that would come to the depositors and
. The local bank from having the deposit
ir q Federal reserve hank would he
greater tHar the . per cent interest on