Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-25
Atlanta Bank Digests
Federal Reserve Lou
Mechanism of Currency Bill Revealed In City's
Fight To Be Chosen Regional Center

All this talk concerning the Fed
eral reserve banks and the new cur
rency bill has a sort of esOteric tone
that still is unmeaning to great
part Of the public-the Atlanta public
along with the rest, in spite Of the
fact that this city has its enterpris-
ing eye fixed on the prospect Of Sc
curing one OF the great reserve banks.
What, after all, is a Federal reserve
| bank, and what is the purport of the
| Federal reserve act commonly known
as the currency bill2
Its purpose, in short, is just this.
In the abstract, to reduce the cost Of
I living, in the concrete, to prevent
tight money, TO loosen the restraints
under which legitimate business, with
resources straitened, sometimes SUI
fer, by offering a source of Credi,:
and to inculcate an impregnahle con-
fidence on the part Of the public It's
one achievement is the creation of the
Federal reserve banks.
A Federal reserve bank may be
thus defined: It is a banking insti-
tuition with capital stock Of not less
than $4,000, 900. There shall be not
less than eight nor more than twelve
Of these In the United States, accord
ing as the organization committee
creates the number of the reserve DIS
tricts
Every national bank within re-
serve district must subscribe to the
capital stock of its reserve bank
sum equal to per cent of It's own
capital stock. II the national bank
fails to do this within 60 days, then
1t ceases to become a reserve agent;
il 1t fails to comply within a Year,
its charter is forfeited
hay nh ,fv~f, xNit
Federal laws as to capital stock and
limitation of liability may purchase
stock in the reserve banks. Private
citizens may purchase stock, but ONLY
in event there is not enough sub
scribed by banks, and only TO the eX-
tent of s25, 900.
The Federal reserve banks have the
power to receive deposits from mem
Der banks, to receive deposits from
the United States, TO receive deposits
from other reserve banks, to discount
notes of member banks growing ont
of commercial transactions, to dis
count acceptances Endorsed by a
member bank (the amount of the ac-
Ceptances, however, not to exceed
one half the capital of the member
bank, and the amount of notes of one
person not to exceed 10 per cent Of
the capital of the member bank).
This however, does not include notes
drafts bills covering merely invest
ments or issued or drawn for the pur-
pose of carrying on trading in stocks,
bonds or other investment securities
except bonds or notes of the United
States Government.
Notes, drafts or bills of exchange
secured by staple agricultural prod
ucts or other goods, wares or mer-
chandise are eligible for such dis
count or rediscount, although If their
maturity occurs in six months or
more only a limited amount can be
discounted.
The Federal reserve banks also may
purchase in open market cable trans
fers bankers acceptances and bills
of exchange; may deal in gold coin
and bullion may buy and sell bonds
and notes of certain kinds; may pur-
chase and sell bills of exchange, es-
tabish rates of discount and estab
lish exchange accounts at home and
abroad
The Secretary Of the Treasury may
deposit public funds with reserve
banks, although this course does not
prevent the member banks from re-
naming Government repositories.
The issue of Federal reserve notes
to reserve banks is authorized for the
purpose of making advances to the
reserve banks. The notes are to be
the obligations Of the Government,
redeemable in gold at the United