The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-11-18
The new
BANKING
SYSTEM

Washington, Nov. 1S.-How $780,
100000 in gold and lawful money was
shifted without a hitch Monday from
the banks which are members Of the
federal reserve system to their reserve
banks was told in yesterdays reports
to the federal reserve board. OF this
total about $137, 100000 was in gold or
gold certificates and the rest in other
forms of money.
According to the estimates between
$40, 100000 and $80000,000 is yet to be
transferred from the member banks to
reserve banks to meet the present re-
serve requirements. Recently the re-
serve board requested that the banks
use money in this operation, and, so
far as the first days reports show, no
attempt was made to resort to that
provision of the currency act which
allows banks to make part OF this
transfer in commercial paper.
The first day of the twelve reserve
banks apparently was devoted largely
to counting this money and to the
usual ceremonies accompanying the
launching of new organization. only
a few million dollars worth of COM
mercial paper was re discounted. The
night, but it was said that the report
was in complete and that the first day
was not an index to what might be
expected later.
OficiaIs who are watching the
operation of the banks said last night
there was every reason to expect large
amounts of re-discounts in the near
future. At present there is close to
$500 000,000 of emergency currency
and possibly $100,000,000 clearing house
loan certificates outstanding or in tho
hands of banks. The emergency cur
rency is subject to tax by the gov
ernment of per cent for the first
three months and an increase after
that period until it reaches 6 per cent.
Clearing house certificates also are
put out at high interest rates. Both
the emergency currency and the certlt-
Gates are secured by paper which OFF,
Gals believe in most instances would
be subject to re-discount by the
federal reserve banks.
Although the demand several months
ago from banks for circulating notes
caused the issuance of emergency cur
rency it is pointed out that there now
is more currency in circulation than Is
needed and it is probable that treasury
officials will use their influence to avoid
/
few applications in the last week and
many indications that the demand is
about over.
Under the new law the banks can
obtain federal reserve notes by re-
discounting with reserve banks the
same sort of commercial paper that
they put up for emergency currency.
So far the reserve board has put no
tax on federal reserve notes. II a
high tax is imposed later, such a step
probably viii be only temporary and
designed to prevent a further increase
in the circulating medium until most
of the emergency currency has been
retired. No demand was made Mon
day., SO far as reports here show, for
federal reserve notes. About $2O,000,-
900 have been printed and are in the
hands of the federal reserve agents OF
the different reserve banks. Their sub
scription for emergency currency Is
expected to be gradual.
The board yesterday began the col
| lection OF the date which is designed
| to give the reserve banks a central
| bureau with valuable information con-
corning borrowers whose paper is be-
| ing re-discounted by reserve banks. In
yesterdays reports the names Of bor-
lrowers were included.