The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1914-07-08

Does Not Say They Must-Now BE-
iieved II Will Be End Of September
Before Equipment is Perfected.
What the twelve regional banks will
do and their relations with the public
are subjects concisely treated in the
New York Post, which says:
organized its first duty will he TO ap-
point thirty directors in Class c.
three for each regional bank-after
which the full board of each bank
must elect II president and other off,
GERS and provide an adequate clerical
force The Indications are that the
new banks cannot lie properly equip
ped before the end Of September or
later.
There is nothing Ia the law to pre-
vent the federal reserve board from
permitting one or two regional banks
TO open before the whole twelve are
ready. and. although that has been
proposed, there is no probability that 1t
will he permitted
Business Between Member Banks.
One question asked everywhere has
been. What will the reserve banks do
when they are ready to start?
There Is no authorization In the law
under which the regional banks may
discount or lend directly to private
individuals They will lend to and re-
ceivc deposits from member banks
alone The law provides. however.
that regional hank may purchase
and sell in the open market. ut home
or abroad. either from or to domestic
or foreign banks, firms, corporations
or individuals, cable transfers and
bankers ar,pptances and bills of ex-
change of the kinds and maturities
by this act made eligible for redis-
count. with ar without the Endorsement
of n member bank" This provision
does not relate to domestic business at
serve banks may ultimately become
good deal of factor in the foreign
exchange market
The chances are that the regional
banks ut New York and Chicago will
do most of this business, acting pos
sibly for the regional banks in other
cities In course of time the regional
banks will in all probability handle "a
large proportion of the foreign business
now done by banks of this city.
Interest on Deposits.
A very Interesting question has to
do with the payment of interest on
deposits The law does not forbid the
federal reserve banks to pay interest
on deposits Of member banks. but it is
not ut all certain that they viii do so
There will he no competition for the
deposit of reserves required by law
and. although some member banks may
poses to carry larger balances with
the regional banks than those called
for by the new regulations, such action
will he governed 10y self interest alone
and not because the excess balances
have been ibid for
IL ms Dt'h SUPPOSED iuiit lne re
gional banks would carry most of the
money that the government will have
to put out. although the law permits
the secretary of the treasury to make
deposits with individual banks. as
formerly But under the act of May
~, l.WS. the secretary collects from
the banks , per cent interest on ''all
special and Additional deposits" made
hy the government On that account
i is possible that the secretary will
require the Regional banks to take
government deposits on the same terms
as the ucuiei banks do that is. to
pity interest on them.
Many country banks have signilied
their intention of rcdiscoInting with
their New York and Chicago cor
respondents. as formerly This viii
mean that paper held by banks in the
west. Instead of being rediscounted
with the regional bank at Chicago or
will he rediScountcd by
The large Wall street banks. which, II
they desire. will secure advances upon
II from the federal reserve bank in
New York.