The Beaver herald. [volume] (Beaver, O.T. [Okla.]) 1895-1923, 1914-01-08

federal reserve bard al Washing.
ton, appointed by q president. and
to consist of the sIretary of the
treasury, the controll- of the curren-
cy and FIVE other Ine bers. Two of
these shall be expeE bankers. but
none shall have bankin Affiliations or
own bank stock dur nj their service.
This board will exercis general con.
troll over the entire sysem.
The temporary "orgaization com
mittee,' or the federal lserye board.
will select from eight to'welve cities
where regional reserve baks shall be
located and will divide ne entire
country geographically VII these
cities as the centers of dislcts. All
national banks in a distrt win be
required to subscribe for ID stock of
the regional reserve bank Athat dis.
trict and to keep a portioAof their
reserves there.
Known as "Memher BanEc
Local banks will be known asmen.
Der banks" because they will ot the
stock of the regional reserve ank
of their district. Each member ank
| will be required to take capital pck
of the regional reserve bank equto
G per cent. of the member banks ol- 4
tai and surplus. The capital OF the
gional bank viii increase or decrea /
so that 1t always represents M
cent. of the combined capital and 81
plus of all the banks of the distrid
that have joined the system.
| National banks are compelled e
join and state banks are permitted e
II they bring their reserve require
ments up to the standard set for ma
tional banks and submit to nahona
examinations.
Public Can Buy Stock.
Public ownership of the stock of th'
regional reserve banks is permltte'
only In case enough banks do not ioi!
in any district to provide a capita
stock OF s4,000,000. In such event tn
public may purchase the stock i
quantities limited to $4,000 for eac
individual. but the voting of this stoc
will be placed In the hands of govern
ment representatives on the board c
directors of the regional reserve banl
The regional reserve banks may
business only with their membe
banks, not with the public. except tina
certain open market operations" sue
as the purchase and sale Of gold go'
ernment, or municipal bonds, and ce
tain forms OF bills OF exchange. ar
| nnrr,,fNfnA Thnun I'll xrfln oh
their earnings from the loans made I
member banks, and from the purchas
and sale Of bonds and foreign bills {
exchange.
Must Put Up Cash.
Member banks will be compelled
put up in cash only one-half of the
subscription to the capital of the ne
banks, the rest can be called for
needed by the regional bank. Div
dends of 6 per cent. will be paid @
this stock TO the member banks, ar
the stock will be non-taxable.
After these dividends are paid on
half of the surplus net earnings go,
to create regional surplus fund. al
when this has reached 40 per cent.
the regional banks paid in capt.
these earnings are to go into u
United States treasury. The balanc
of the net earnings are to be paid
the United States as franchise ia
With the machinery thus Great,
for new banking system that Is su
Elementary to the commercial ban
Of the country. the law provides for
gradual transfer OF part OF the bai
reserves 10 these new ''reservoi
banks.
In order not to disturb business &C
ditions, or to withdraw too sudden
the heavy deposits of country banks
the large cities, the law provides th
three years may be .consnr"~A a. .
ing th~-- an,
49,, 20 balances and that. II nee,
sary' part OF the reserves transferr
70 the regional hanks may consist
: commercial paper.