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 member
city may make loans secured by farm
lands for time not longer than five
years and for an amount not exceeding
so per cent of the actual value of the
coed 20 per cent of the capital and sur
plus, or one third of the time deposits,
of such bank making the loans.
Amended Vreeland Bill.
We realized in the Senate that 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.
20 avoid this trouble we amended the
Nreeland- Aldrich 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 Sc
heavy, reaching in the fifth month 10
per cent, that the rate was almost pro-
hibtiVe
eve. therefore reduced the rate of
tax In the NTeeland- AldriCh act so that
the maximum rate would be : per cent
Nhiel the rate for the first six months
would average only about 3la per cent
per annum. This provision of the bank
ing and currency act has greatly re-
heVed an apprehension of enforced con-
traction during the present year, 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 a banking association for six
months involves a tax of only S1.I5. II
Is omposSihlc, therefore under such a
condition to have a currency stringenCy
pending the organization of the sys-
TEN.
Approves New Measure.
II do not hesitate to give my most
cordial approval to the new law. II will
prove new freedom to the business OF
our country, 1t will prevent currency
panics It will safeguard against runs
Of banks available when needed, 1t
viii make currency elastic II will en-
able banks 10 expand their business. II
will facilitate the removal of money
from a section in which 1t is not needed
To a section in which it is needed,
Those who have objected to Govern
mcnt supervision and control Of Fed
cral reserve banks forgot that while the
STOCK OF lllt Il six OF tItTlldlN ana Tue
Bank OF France is owned 10y individuals
the directors are designated 10y the Gov
eminent and that while the stock "
the Bank OF England is privately owned
bankers brokers and GisCounters OF bills
are excluded from the board Of directors
and the bank Is really controlled 10y md
under law that amounts TO Government
supervision equal to that provided 10y
our banking and currency bill.
1T is now perfectly evident that al
the great national banks of the country
intend TO avail themselves OF the priv
tlege of becoming members Of Federal
Advises Bankers TO join.
81 do not hesitate to advise state
banks to take advantage OF the oppor-
tuuity to become members of a Federal
reserve bank They viii only be re
uuirad to take from their assets 3 per
, cent Of their capital stock and surplus
To- DE invested In the stock Of the Fed
eral reserve bank, They VIII receive {
per cent interest on the inn stmnt. II
/ they are disposed 20 complain that the
law requires that a portion ot their re-
serves be deposited with the Federal re-
serve bank interest while they now re
ceiye per cent interest In New York
! would reply that the money which the
banks keep there on deposit is the mon
ey ~ their depositurs, and the benefit
that would come To the depositors and
he local bank from having the deposit
Ia Federal reserve bank would he
greater than the : per cent interest on