Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-01-01
HALF BILLION IN
ASSETS FOR THE
FEDERAL BANKS
Representative Buckley Ex-
plains Probable Operation of
Reserve Proyisionsi ACcu-
racy Impossible Now

p-----4
fsegelAl ooaafsrombrseE 70 MORNING JOURNAL
Washington, Dec s1-An expert
explanation Of the probable operation
Of the bank reserve provisions Of the
new federal reserve banking act was
obtained from Congressman Robert
D. Buckley, Of Ohio, a member Of the
banking and currency committee Of,
the house Of representatives. II is
his opinion that thrty-slx months
after the new act fig IN effect assum-
Ing that all national banks enter the
system and baslng his calculation on
the status o. national banks through
out the country as reported 10 the
comptroller VI the currency on August
3. 1919, the minimum showing 70
the national banks IN the system VIII
Igiyc tho combined federal reserve
bnnks total assets tn cash OF $780,
$4,000. and loans Of $l7i55C,OOO,
while their capital would be s5S,445,-
1000 and the deposits GS,32G,00O
Mr. Buikley thinks this is the show
Ing that Is likely TO be the result OF
the operation Of the bank reserve ana
other provisions Of the new law, II an
national banks enter the new federal
lreserye system, and deposit with the
federal reserve banks the minimum
they are required 10 deposit under the
law The total capital and deposits Of
THE federal reserve banks, on this
basis. assuming also that $4,000 600
Of government deposits will be with
drawn from the United states treas
Jury and put into the banks, will be
lS621.f71, 900. while the total cash and
loans for the federal reserve banks
also viii be SG21,771,000.
/ If an the national banks would en-
ter the system and deposit with the
foderal reserve bank the largest
amount they VIII be allowed" to
count as reserves In the federal re-
serve bank, the total cash and de-
posits of the federal reserve banks
win be about 5000, 100000 greater, ~
I'm the nelghborhoOd Of si30,0O0,OOO.
Operation Of Reserve Section.
Representative Buckley was asked
TO explain the probable operation OF
the bank reserve section Of the bank
ing and currency law because the
final form of that portion Of the act
was based on elaborate computation
made by Mr.. Bulkle9 who was tht
j oxport of the house banking and eur
lroney committee on tho reserve pro
visions
MIR Bulley prepared a table show
Ing in general way, what the ulli
mate result of this section will be af
ter the final adjustment Of reserve
has boon made thiriy-slx months az
ter the secretary OF the treasury OF
ficially announces the establishment
OF q federal reserve bank
Accurate predictions" Mr. Bulkle
explained, "are. In the nature Of IN
4 case, impossible since no man cai
1 know how many banks viii hay
come into The proposed federal re
serve banking system at any give
time Some assumption must b
made before we can begin to figure
ana the most convenient Is that al
y national banKs and no state bank
{ will enter the system. II Is, Of course
g fair TO presume that some nationa
3 banks may go out and some stat
IL banks will come In.
"Thcse might offset one another
But ln any event we have not OK
pected a large proportion Of the stat
= banks 10 enter until after the success
OF the plan shall have been fun
demonstrated
The calculations made by Nj
= Bulklov for ascortaining the probab
e operation OF Tho reserve section ar
IL based on the only known factor, III
y total number of national banks an
/. their actual condition AS reported Of
i, fleially Co the comptroller of Oh
treasury ON August 3. 1913,
Country Hanks.
The country banks ON August ., 1911
had net deposits. subject to reserN
Requirements. of S3.6e5.l07,o00 FiN
- per cont Is the minimum reserve men
t. Der banks are required TO carry vii
De lhe regional reserve honlts II amour
H. to SiTa4S6.0o0. The capital Of q
81. country banks is Sgs5,559,000.
which they would be required TO mai
d. per cent subscriptions to the sto'
If the federal reserve banks. Of whis
y, 4 per cent they would have TO ~
~ ono half. United States deposi
~ would be Withdrawn from the region
~ banks and deposited in the region
X reserve banks Consequently Il
t. country hanks Mr. Buckley asserte
d. would have to make d payment
IA about S93ft0i. 600 TO the reser'
a. banks Country banks are now I
.- quircd to carry Is per cent reser
h, against deposits In their own vaul
, The new law would permit them
carry as much at 3 per cent in th'
own vaults and count it as reserve,
hls computations AR bulkley, Their
'' fore added per cent and assum
at shat they would withdraw this fro
NJ thoir reserve ugents and put it
sh their own vaults as reserve.
he Tho balance of am the count
banks with reserve agents ON Augl
,p q. 1918. amounted 10 S8oa,393,000 a
NM this IS accepted by those responsil
i, FOR the bin as indicating that t
NJ. country banks could make all of [
payments required hy the new fe
torM reserve act by drawing agah
their reserve agents and stlll alli
h-I S3N.a4e.00Q. or about one-tenth
e their balances. 10 remain on dcpo
- with their ascnts
ur City Banks.
ke The deposits of city banks on 4
gust q 1918. were Sl.SSi,6AT.0oO a
it $l6aglt 0Qe were Withdrawn by
as country banks, The former would he