Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1914-01-01

The regional ban1u ma also Ais-
count "acceptences based on the I'M
portauon or. expectation Of goods
The new treasury notes, which are
to furnish The elastic" element In the
currency system and to add to tie
country's circulating 0 In time q
need. Will come into use In the follow.
ing ways:
The notes win be printed by the gov.
ernment with q distinctive style for
each regional reserve bank. One u
the three directors named by the fed
erai reserve board for each regional
pank Will be known as the federal re-
serve agent" for that bank, and q sup
ply OF the notes win be placed In his
custody.
Should a regional bank desire to pay
OUT more money than its cash re-
sources VIII permit, the law provides
mat 1t may put some Of It's r~ediscount-
eo commercial paper into the hands
OF the federal reserve agent" and re-
ceive in return the new treasury notes.
Fol each note that it puts out Of cir
culat1on tho regional reserve bank
must set aside in gold 40 per cent Of
the value of the note, a. . guarantee
for Its redemption.
This gold, with the commercial pa
per held by the federal reserve agent"
rs the protection behind the now
S~0 > - SalO6V AOS6H Will A10O %
guaranteed by the government and
may be redeemed in gold at the United
States treasury.
Each regional bank, under the act,
must keep q reserve of IS per cent OF
the deposits 1t has received, besides the
40 per cent gold reserve behind the
po1a notes i issues. II the
falls below 20 D . cent
heavy tax is imposed on the bank
which In turn adds the tax to the rate
II charges member banks for rsdis-
'counts. Inis was designed to stop an
over expansion of currency. In times
! sudden stress the federal reserve
board ~ revise those provisions in
order to furnish quick relief to any
community.
No regional bank can again ray out
OF the notes Of another except under 8
heavy tax. These notes are expected
TO return to the regional banks and be
from circulation whom the
None Of the existing forms Of cur
rency except the national bank notes
Will be disturbed by the new Law.
The United States bonds now used to
secure the issus OF bank notes are to b.
taken up at the rate Of $25, 900, 900 .
year by the regional reserve banks and
new treasury notes or short term 3 per
cent bonds will take their place. Ma
Ion bank currency ts expected grad
ually to retire.
The federal reserve board will exer-
else final control over the entire opera
ton OF h system. It can compel one
regional bank to loan to another In
time OF need; can suspend all restric-
tlons surrounding the reserves which
regional banks must hold, and can re-
move directors Of regional reserve
hanks whenever 1t IL believed neces-
sary.
While Tho banks retain control Of the
boards of h regional reserve banks.
connection with the federal re-
serve board 10 only through an i'd.
visory council, made up Of one repro.
from each federal reserve
district. This council will meet in
Washington to confer with the federal
reserve board ION general business
conditions" and to make recommends
lions and suggestions concerning dis
count rates. note issues and ressrvo
conditions.
banking methods. embraced in the new
except those in New York, Chicago
and st. Louis, to make direct loans on
dve-year farm mortgages, UP to a5 per
cent Of their capital and surplus, or up
to ono-third Of their time. deposits
Another provisions in the law permits
national banks having q capital Of 81.
000, 900 n more 70 open foreiKn5
Similar authority eisy given
to the regional reserve banks, the pur.
being to facilitate the deve1sp.
OF American trade abroad.