The daily Alaskan., 1914-01-24
THE REGIONAL BANKS.

| al banks which are 10 DC eSbolOALS7@ cd by the government in various commercial centers of the United 1 States appeared in a recent issue of the Tacoma Tribune and was made by Ralph s. stacy, president of the National Bank of Tacoma at an informal gathering of profess ] ional and business men at the com merciaI club in that city. He sad;
 "The existing national bank sys- tenn has been in effect since 1SO5 and from time to time its made quacy has been demonstrated by Pe- riodical "panics" and times of mon ey "striugency". In 1907, when . business admittedly was good and the crops large, a panic crippled people and halted industry. This panic was due entirely to the bad currency system"
 There are five principal features in the new law. l. centralizes system Cf bank reserves in from eight to twelve banks, one for each reserve district in the place of the scattering of bank reserves through out the country. Instead of having to send tc New York for money, member bank will obtain it from it's district reserve bank.
 
 The general funds ,i the Unit ed States treasury, amounting to S322, 2,SS2,915, on December l, 1913 will be deposited in the reserve banks aud thus placed in circulation Government bonds also can be de- posted in these banks as a basis
 or currency issue.
 The provisions for note issues are that tne regional banks may is sue currency against United States bonds or against commercial pa per on the basis of 60 per cent of it's face value, the balance of 40 ! per cent being cash. This provision will prevent pautcs.
 Tn cases of extreme urgency the federal reserve board may suspend the reserve regulations and the amount of the reserve required to be held may te reduced from Is to 10 per cent. This provision will ren der any breaking down of the na- tionaI banking system impossible.
 To put the law into effect commission consisting Of the secre- taries of the treasury and of agri- culture is now touring the country to establish the regional bank dis tricts, which must be completed within 60 days from the date of the signing of the bill by the president, and every bank intending to enter the new system must notify the treasury department on or before February P. The regional banks may number from eight to twelve, but it is probable that not more than 10 will be established at this time. Thereafter the banks in each district must get together and elect six directors for the regional bank. three more being appointed by the l federal reserve board.
 The composition of the federal reserve board will be such that some members of the board will carry over two administrations. The | regional bank directorships will be organized in such a way that these l banks cannot be controlled by any ! one set rf men. The law provides for the division of the member banks into three classes, according ! to their size, and each of these i classes will have an equal voice in ! the election of the directors of the ! regionaI banks. The capital of each regional bank must not be less than $4,OOO,O00. On the basis of this capitalization the bank to be 1 established on the Pacific coast would need the banks of the seven l western states as subscribers, each 1 paying in 6 per cent of the amount of it's capital and surplus and being finally liable to another 6 per. cent, should it be required. Outside of these subscriptions by the mem hershiD banks, the only funds which the regional banks will have will be government funds. The region al banks Will accept no deposits ! from the public.
 "The law provides that the re- gional banks may rediscount any notes, drafts or bills of exchange representing actual commercial transactions upon the Endorsement of the bank presenting such paper,