Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1914-11-21
LOCAL BANK SATISFIED
WITH RED|sCOUNT RATE
Will Not Join In Reported Agitation
for Reduction, Says
Seay.
EARLY AMENDMENT UNLIKELY
Purposely Put Redisconnt at Level
Of Discount Rate to Discourage
Use OF Commercial Paper In Making
Reserve Payments.

Tho FiftE Federal Reserve District
has no share In the reported agitation
! OH the part OF sevcra, Southern and
Western districts for "a reduction In
the rcdiscount rate. Officials of the
ltichmond Reserve Bank. questioned
on this point yesterday, expressed their
satisfaction with the rate fixed for
! tn. district by tho Federal Reserve
Hoard. and declared themselves OPP
osea tu an amendment Of the rate
a, this time
1T Is hard TO sec how any OF the
Federal Deserve banks can Justify an
| application for II reduction in the re.
discount rate when II has been In ef-
feet less than q week." said Cover
nor George j. Seay. OF the local bank,
with the exception OF several large
transactions In the New York bank.
no bunk In the system has lone any
rediscounting In any volume. !: viii
be time enough TO arply for change
In the rate after rcd.scountinR has had
reasonable try-out.
PART OF wELL-BALASCED
NATIONAL. BANKING SCHEME
Those districts that arc dis.atis-
fed with their discount rate am
afraid, are not looking beyond their
own interests. They forget. perhaps.
that ,hey are part of a balanced ma
brium IL Is absolutely essential to
preserve. In liking tho discount rates
| for the several districts. the Federal
Reserve Board had In mind the needs
OF the country At large. II waa cs
gential that the country's gold reserve
he protected. We have stlll large
volume OF obligations abroad. All
these factors figured In the rates that
were finally adopted, and they cam
not now he ignored.
"This fact Is perhaps forgotten
The member banks OF the reserve sys-
TEN In any district need not coniine
their discouptlng operations 10 the
Federal reserve bank OF the district
They are at liberty. to rediscount their
paper With any bank they choose and
at 4 lower discount rate IL they can
obtain H. u conditions are favorable
In the district, banks will probably be
able to rediscount their paper with
| other banks at a lower rate than that
charged by the Federal reserve bank.
Such condition may even he expect
ed at times. and viii In no WAY dimin-
/ ish the service OF the Federal reserve
bank
! DEMAND ron LOWER RATE
NOT SUPPORTED HERE
Mr. Seay made It clear that the de-
mand for lowering OF the rediscpunt
rate finds no support In this district.
The local bank has as yet done no re-
discountiny. 4 beginning In this di-
rectiou will probably be made next
week.
Tho Federal Reserve Board. il Is
stated, has no present intention Of
| changing the rate. Such action is not
! at all likely until all reserves OF mem
! her banks. required at this time. are
transferred TO the reserve hank vaults.
| 4.
proximateiy 90 per cent Of the re-
serves due from the member banks Of
the Fifth District have been received,
4 and are now In the vaults OF the local
bank. The payments from this source
exceed 100000.
Richmond Reserve Rank is per cent.
This Is practically the universal dis
count rate in the Fifth District. The
Federal Reserve Board has beer anX-
ious that all the FIRST instalments OF
reserves be deposited by member banks
| in gold or other money. and that adj
vantage be not taken of the provision
OF The act by which reserves may be
transferred in the sha pc or rediscount-
ed commercial paper-a transfer Of
credit which adds nothing to the actual
cash of the reserve banks or their po-
tential loaning power.
WILL DISCOURAGE USE
OF REDISCOUNTED PAPER
In order to discourage the use of re-
discounted paper In the making OF re-
serve payments. the Federal Reserve
Board put the rediscount rate about
on the level OF the discount rate In
the several districts. Under these cir
cumstanccs. the member banks could
derive no particular benellt from pass
ing on their commercial paper, and
tor the most part elected to make their
reserve payments In gold or It's eIuivu-
lent.
The Federal Reserve Board, II is
stated. has about concluded not to tax
Federal reserve notes. This will make
them more attractive to banks who
now have In their possession quantities
OF emergency currency subject to taxes
and interest charges. Federal reserve
notes, In 81 and $40 denominations. In
the amount OF s".000,000 are stored In
the vaults OF the Richmond Reserve
TANK 'awoitins requisiti0n.
y The biweekiy meeting OF the hoard
of directors Of the local bank, which
was scheduled for next Thursday. Will
probably he held on Wednesday In
stead in order to permit the members
70 spend Thanksgiving at their homes.
Chairman William 1ngie has been pre-
Sented with a mahogany gareI by
Charles w. Vaughan, a member OF the,
directorate of. the broadway National
Bank. and he will use 1t for the first
time n-spreslding over Wednesdays
meeting. Tho gavei. II la stated,Ssqs
fashioned from one OF the mahogany
railroad Ties laid By the French on the
lsthmus when they were trying TO con-
struct tho Panama Canal.