Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-09-07
NATIONAL BANKS
CAN EXTEND TO
SAVINGS FIELD
Newark Institutions Apparent
Iy Undecided Over New Fed
eral Act Provisions.


1t was learned today that the pro
visions of the new federal bank re
serve act will permit national banks
to take advantage of it to do bushes.
as savings institutions. officers of ma.
| tional banks in Newark have not yet
taken any attitude relative to the
savings bank matter. They are no.
ready to say what they will do il
the matter. Nor will they know unit
after the reserve board has formu-
! lated its rules for their conduct. This
| may not be done within four or five
months, and until the regulations are
made public bankers generally are
| unwilling to take advantage of the
act.
Another provision in the act will be
| great benefit to reserve banks in
rural communities This permits
| banks not in central reserve cities to
make mortgage loans on farm lands
The mortgages are limited to five
years, and the loans made must not
be for more than fifty per cent. OF
the value of the properties.
The provisions enabling banks to
do a savings business offer a number
of advantages to the institutions. A
must hold a cash reserve equal to
twelve pei cent. of the amount of
deposits subject to check, but under
the new law will not be compelled to
hold more than five per cent. of its
savings deposits in reserve. In q re-
serve city the bank must hold in re-
serve fifteen per cent. of it's business
deposits and in a central reserve city
eighteen per cent, but in no case are
they forced to hold more than five per
cent. of the savings deposits in re-
serve. This frees for investment and
for the banks general uses a consid-
cradle sum of money
Must Pay Interest.
But there is another side to the
matter. The institutions will be COM
PEELED to pay interest on savings de-
posts and this will add considerably
to the expenses of the banks. In
view of this many bankers are reluc-
tant to undertake the work. The
enabling sections of the act follow:
Bank Deposits.
Sec. 10. Demand deposits within
the meaning of this act shall COM
prise all deposits payable within
thirty days, and time deposits shall
comprise all deposits payable aft
thirty days, and all savings accounts
and certificates of deposit, which are
subject to not less than thirty days
notice before payment.
A bank not In a reserve or central
reserve city shall hold and maintain
reserves equal to twelve per centum
of the aggregate amount of its de-
mand deposits and five per centum
of its time deposits.
A bank in a central reserve city, as
now or hereafter defined. shall hold
and maintain a reserve equal to eigh-
teen per centum of the aggregate
amount of it's demand deposits and
five per centum of its time deposits.
A bank in a central city, as now
or hereafter defined, shall hold and
maintain a reserve equal to eighteen
per centum of the aggregate amount
of it's demand deposits and five per
centum of its time deposits.
Short Loans on Farm Lands.
ANY national banking association
not situated in a central reserve city
nav make loans, secured by improved
and unencumbered farm land, stu
ated within it's feleral reserve dis
trict, but no such loan shall be made
for a longer time than five years nor
for an amount exceeding fifty per
,entum of the actual value Of the
property offered as security. Any
such bank may make such loans in
an aggregate sum equal to twenty
five per centum of its capital and sur
plus or to one-third of its time de-
posits and such banks may continue
hereafter as heretofore to receive
time deposits and to pay interest on
the same.