Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-20

serve bank. to be fixed by the Federal
reserve bond.
1T is also provided that member
bank not located in a central reserve
city may make loans secured by farm
lands for time not longer than five
years and for an amount not exceeding
90 per cent of the actual value of the
property and for an amount not to ex-
coed 25 per cent of the capltar and sur
plus, or one third of the time deposits,
of such bank making the loans.
Amended VreeIand Bill.
we realized in the Senate that a con-
siderable portion OF the present year
would be required to organize and TO
put into effective service the Federal
reserve banks. 1t was apparent last
fall that loans were being contracted on
account of the belief that pending the
complete organization of the Federal re-
serve banks the subscription by mem
Der banks to the capital stock and the
transfer of reserves to the Federal re-
serve banks would lessen the amount Of
currency at the command of the banks.
''To avoid this trouble we amended the
Vreeland- Aldrich act AS passed in 1908,
and as it stood upon the statute books,
while 1t provided for the loan to bank
ing associations of $500, 900 900 of notes,
the tax placed upon the loans was so
heavy, reaching in the fifth month 10
per cent, that the rate was almost pro-
hibitive.
C.
tax in the Vreeland Aldrich act so that
the maximum rate would be per cent
while the rate for the first six months
would average only about 31a per cent
per annum. This provision of the bank
ing and currency act has greatly re-
lieved an apprehension of enforced con-
traction during the present year, and as
it will continue in force until July l,
1915, there need be no scarcity of cur
rency pending the complete organiza-
ton of the Federal reserve banks.
Under this amendment the use of
$500 by banking association for six
months involves a tax of only s1.75. 1t
is impossible, therefore, under such
condition to have a currency stringency
pending the organization of the sys-
tenn.
Approves New Measure.
'T do not hesitate to give my most
prove a new freedom to the business OF
our country. 1t will prevent currency
panics. 1t will safeguard against runs
upon banks. 1t will make the reserves
will make currency elastic. 1t will en-
able banks to expand their business. 1t
will facilitate the removal of money
from section in which It is not needed
"Those who have objected to Govern
ment supervision and control Of Fed
eraI reserve banks forgot that while the
stock of the Bank of Germany and the
ia NIX OF france IS owned Dy lflOiNlNu dls
the directors are designated by the Gov
eminent and that, while the stock of
the Bank of England is privately owned.
bankers, brokers and discounters of bills
are excluded from the board of directors
and the bank is really controlled by and
under law that amounts to Government
supervision equal to that provided by
our banking and currency bill.
at is now perfectly evident that az
the great national banks Of the country
intend to avail themselves Of the priv
iIege OF becoming members Of Federal
Advises Bankers to Join.
81 do not hesitate to advise State
banks to take advantage OF the oppor-
tunity TO become members of a Federal
reserve bank They will only be re-
quired to take from their assets per
cent OF their capital stock and surplus
10 be invested in the stock Of the Fed
eral reserve bank. They will receive 6
per cent interest on the investmnt. IT
they are disposed TO complain that the
law requires that a portion Of their re
serves be deposited with the Federal re-
serve bank while they now re-
ceive per cent interest In New York,
would reply that the money which the
banks keep there on deposit Is the mon
ey OF their depositors. and the benefit
that would come TO the depositors and
the local bank from having the deposit
in Federal reserve bank would be
greater than the 2 per cent interest on