Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1914-01-01

heavy deposits Of country banks In the
large cities, the law provides that three
years may DO consumed In shifting
these balances and that, II necessary
part Of the reserves transferred to the
regional banks may consist Of CONNER
cial paper.
The account OF reserve required from
every bank under the new law ana the
place where 1t must be kept are ~ fol-
lows:
Country banks: Nve-twelfths must
be kept in the banks vaults for two
years and four-twelfths after that time,
For the first year two-twelfths must be
one-twelfth each six months thereafter,
until 1t reaches five-twelfths OF h to-
tai reserve. For three a h unal-
lotted part OF the reserves may be kept
In the banks Of reserve cities; after
that time 1t must be kept either in tic
country banks vaults or in the region
al reserve bank.
required. Is per cent OF demand and
per cent OF time deposits. six-fifteenths
must be kept in the banks vaults
for first two years. and ftve-fifteenths
after that time. Three-fifteenths
u be kept in the regional bank for
the first year. increasing one~-ftfteenth
every six. months thereafter until 1t
AodCIlcS SIA-klLScoulLiS. TOT LuIS0 years
the unallOted portion OF the reserve
may be kept in other banks in its own
vaults or In the regional bank: after
that time In of the latter two
places.
Central reserve city reserve banks
CNew York. Chicago and st. Louis):
Total reserve required Is per cent OF
posits. Six~-eighteenth must be kept in
the banks vaults; seven
~efghteenths In the regional reserve
banks. and the remainder five
~eighteenths In either place tho bank may
choose.
Those immense funds OF reserves
rom member banks, together with
deposits of h regional reserve banks.
Each Of these banks will be admin
istereq by q board Of nine directors,
Six Of whom will be elected by the
banks and three appointed by the fed
eral reserve board.
h regional banks may rediscount-
that Is. buy at q discount from Its
member banks-"prime commercial
paper" when the member banks desire
to convert these assets into money?
The exact terms Of this important pro-
vision as to the character Of paper upon
Which the regional reserve banks may
furnish cash are as follows:
upon the Endorsement of any OF its
member banks with a waiver or de-
mand notice and protest by such bank,
any federal (regionaD reserve bank
may discount notes. drafts and bills of
exchange arising out Of actual COM
mercial transactions; that Is notes,
drafts and bills Of exchange issued or
drawn from agricultural, industrial or
commercial purposes or the proceeds of
which have been used or are to be used
Tor such purposes, the federal reserve
board to have the right to determine
or define the character OF the papers
thus eligible for discount within the
meaning Of this act.
Nothing in this act contained shall
DO construed to prohibit such notes.
drafts and bills OF exchange, secured
by staple agricultural products. or
goods, wares or merchandise from
being eligible for such discount. but
such definition shall not include notes,
drafts or bills covering merely invest
or issued or drawn for the pur-
pose OF carrying OF trading in stocks.
or other investment securities ex-
Of tho United States.
Notes, drafts and bills admitted 20
discount under tho terms or this para
graph must have q maturity at the
Of discount of not more than 80
days. provided that notes. drafts and
bills drawn or issued for aRricuitural
purposes or based on live stock ana
having = maturity not exceeding sfx
months. may be discounted in An
amount to be limited to q percentage.
OF the capital OF the federal (regfonaD
reserve bank. to be ascertafned and
liked by the federal reserve board.