The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1914-11-14

"a i<SiHiuoI tO MI. NlannllS
ceeds of which have been or are to
be applied to a permanent invest
ment.
Maturities of discounted bills should
we wei distributed so that a reserve
bank should be in a position to liqui-
date one-third of all its investments
within 80 days.
Bills presented for rediscount
should be essentially self-liquidat-
ing" which, the board explains,
means that they should represent
some distinct step in the productive
or distributive process and be Of such
character that it is reasonably sure
they can De collected at maturity.
In addition. the board requires that
such paper be indorsed by the men,
Der bank Offering it for rediscount:
that the indorsed bank waive demand
notice and protest; that such paper be
issued or drawn for agricultural, in
dustrial or commercial purposes or
the proceeds Of which have been SO
used that If in the form Of accept
ances, must be based on transactions
involving the importation or exporta =
ton Of goods, and have maturity Of
not longer than three months. Ac-
ceptances must be indorsed by a men,
Der bank and the total amount offered
by any member bank shall not exceed
cne-half of its paid up capital and
surplus. The aggregate Of paper
bearing the Endorsement of any one
person, corporation or firm, redis-
counted for any one bank, shall not
at any time exceed 10 per cent. OF un-
impaired capital and surplus, this not
to apply to- bills of exchange drawn
against actually existing values.
Paper drawn for trade i'm stocks
and securities will not be acceptable.
nor will such paper drawn for mere
investments, and the board inter-
prets this phraseology Of the law to
exclude paper, the proceeds Of which
may be used in investments in
land, plant, machinery, permanent
improvements or transactions of sim
liar nature. The pure hase of COM
poses would constitute q "mcrc in-
vestment' in the eyes of the board and
will be excluded.
The board also announced that for
the present it had fixed 25 per cent.
OF banks capital as the limit up to
which 1t may rediscount paper for
agricultural purposes or based on
live stock" having not more than six
months maturity. This limit may be
increased in agricultural districts in
time of need.
The board announced it hoped tc
establish II central credit bureau, in
which the financial records of biz bor-
rowing corporations and individuals
will bc kept.
Until January l. next q written
statement Of an officer of a bank ap-
plying for the rediscount of any bill
that is to be used for the purpose
designated will be sufficient. After
that no paper will be rcdiscountcd un.
less it is eligible under the boards
regulations and the seller has given Z
statement to the member bank.
/ This statement is to be signed under
oath and must show the character o
business. the balance sheet, the prof
+ and loss accounts. permanent and liXc,
Investments. slow and quick assets
capital, long term and short term
loans. 1t will show also the maNimun
aggregate up To which the horruWin.
concern expects to sell short paper
The signature of member bank ul
such paper will hc considered hindin.
and a guarantee that the borrowers
statement complies with the law.