Lincoln County times. (Jerome, Idaho) 1911-1919, 1914-01-01

: ieoeral reserve board at Washing |
appointed by the president. and
" oohslst or the secretary OF the
'ieasury, the controller of the curren-
~ II hve other members. Two nj
e shail be expert bankers, but
none shall have banking affiliations or
o~n Dahk stock during their service.
! MS board will exercise general nm
trol over he entire system.
me temporary Organization com
i"i.,ee' or the federal reserve board.
VIII select from eight to twelve cities
"here regional reserve banks shall he
located and will divide the entira
couhtry geographically with these
CITES as he centers OF districts. All
national banks in a district will he
required to subscribe for the stock of
'he regional reserve bank in that dis
'rlct and to keep a portion of their
reserves there
Known as "Member Banks.r
Local banks will be known as mem
Der banks because they will own the
BUCK or the regional reserve bank
OF their district. Each member bank
VIII be required to AXE capital stock
Vi the regional reserve bank. equal to
D per CEN OF the member banks CAPT
TAI and surplus. The capital of the re.
gional bank will increase or decrease
so that it always represents 6 per
cent OF the combined capital and sur
plus or all the banks OF the district
mat have joined the system.
National banks are compelled to
JOIN and state banks are permitted to
Il they bring their reserve require
ments up to the standard set or ma
uonal banks and submit to national
examinations.
Public Can Buy Stock.
Public ownership Of the stock of the
regional reserve banks is permitted
only in case enough banks do not ioin
IN any district to provide a capital
stock Of 81 600. 900. In such event the
public may purchase the stock in
Quantities limited to s25, 900 for each
individual. but the voting OF this stock
VIII be placed in the hands OF govern
ment representatives on the board OF
directors of the regional reserve bank
The regional reserve banks may dc
business only with their member
banks. not with the. public. except that
certain open market operations sucl
as the purchase and sale of gold. gov
eminent. or municipal bonds. and Ger
'ain forms OF bills OF exchange. arr
permitted. These banks will make
their earnings from the loans made t
member banks. and from the purchas'
and sale OF bonds and foreign bills o
exchange.
Must Put Up Cash..
Member banks will be compelled t
put up in cash only one-half of thei
subscription to the capital Of the neN
banks. the rest can be called for
needed by the regional bank. Div
dends OF 6 per cent. will be paid o
this stock to the member banks, an
the stock will be non-taxable.
After these dividends are paid on
half OF the surplus net earnings goe
to create a regional surplus fund. an
when this has reached 40 per cent. {
Ah' i'btoAdl dhh : paul III NdplAt
these earnings are to go into tn
United States treasury. The balance
OF the net earnings are to be paid I
the United States as a franchise ia
With the machinery thus create
for a new banking system that is su
Elementary to the commercial banl
OF the country. the law provides for
gradual transfer OF part of the ban
reserves to these new reservoir
banks.
In order not TO disturb business co
ditions. or TO withdraw too sudden
the heavy deposits of country banks
the large cities. the law provides TIL
three years may be consumed in shit
ing these balances and that. if nece
sary. part of the reserves transferr'
to the regional banks may consist
commercial paper.