Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-01-13
Ralph S. Stacy Calls New Law
the Best Piece Of Legisla-
ton in Fifty Years
EXPLAINS ITS OPERATION
Tell How Federal Reserve
System will Serve to As
sist General Trade

TACOMA, Jan. 1O.-Four hundred OF
Tacoma's most prominent business
men Friday heard an able exposition
OF every important phase of the new
currency law in IL o'clock talk in
the Commercial Club assembly room
by Ralph S. Stacy, president of the
National Bank of Tacoma. in which
Mr.. Stacy characterized the law as
being the best piece of legislation
enacted for the general benefit OF
the country in 80 years. AS a result
of the law, Mr. Stacy said also he
expected business in the Northwest
and throughout the country to show
great improvement this year and next
and that the end of five years time
would see a remarkable era of pro
gress.
Following his exposition of the new
law and it's allied phases Mr.. Stacy
was kept busy for some time answer
ing few specific questions as to the
effect of the new law either on Ia
coma or a community the size of this
one. ~
Business to Be Aided
"The business of a community the
size of Tacoma" he said in reply to
one query cant be disturbed by the
new system because the money re-
leased by the difference in reserve
requirements between the old and
new laws will be more than sufficient
to pay all the call deposits of the
United States and the country nation
al banks, as now carried in Tacoma,
even provided they are all withdrawn
at once The new law allows SO
months for the gradual transfer OF
country bank allowances and banks
in Tacoma and other cities to federal
reserve banks, and gives the secre-
tary of the treasury permission to
continue bank deposits of United
States funds to national banks if he
so desires. The result, as far as Ia
coma is concerned, will be to furnis!
more rather than less money for the
transaction of general business
In reply to another question. M
Stacy said;
Composition Of Boards.
"The secretaries OF agriculture and
the treasury form under the new law
the organization committee. and are
vi ahn1t tho country do
termining the claims of various cities
for federal reserve bank. The fed
eral reserve board will consist of sew
en- members, two of banking expert
ence. The regional banks will be
managed by a board of directors OF
nine men to each bank. three being
appointed by the federal reserve
board at Washington, d. C. and six
to be elected by the banks who are
stockholders in federal reserve banks.
Three of the latter are to be men
of banking experience. and two OF
the three to be appointed by the fed
eral reserve board are also to be OF
proven banking experience, thus Civ
ing five of the nine men having con-
siderable banking experience The
general direction of all regional banks
will rest in the reserve board. De
posits may come from two sources,
one from the United States and one
from the reserve of bank members.
Mr.. Stacy's general talk on the law
was as follows:
"The report of the comptroller Aug
8 shows that there were 29.254 banks
of all kinds in the United States on
that date. Under the present system
of reserves each country bank car
ries a certain percentage of cash in
it's own vaults and the balance With
CITY banks which in turn carry larg
er percentage of cash on hand ans
the balance with banks in the larg
est cities of the country.
"The banks in New York, Chicago
and St. Louis, which are banks a
last resort insofar as reserves arf
concerned, have recourse in times o.
trouble only upon foreign bankers
and the favor of the secretary OF the
treasury, who may or may not, a;
it suits him, deposit large amounts
Of government money in the bank:
temporarily.
System Will Stand Tests.
"The United States has struggled
along under this highly individualistl'
system Of banking for over so years
Panics have come periodically, bring
ing untold hardship on the business
interests of the country; but the las
one, in 1907, coming when crops wer'
enormous and business generally IL
good condition, proved beyond doub