South Bend news-times. (South Bend, Ind.) 1913-1938, 1915-04-01
RESERVE BOARD To
AID IN EFFORT To
GET RUSSIAN TRADE
New Regulations to Be Issued
Will Provide Increased Cap
itaI for Transactions and
vii! Enable Extension.

WASHINGTON, April /. - Addi-
tiOnal regulations will be issued by
the federal reserve board within the
next few days which will be of the
greatest assistance TO the exporters of
the United States, especially those
who are seeking to build up trade
with Russia to offset that which is be-
ing lost through the blockade of the
ports of Germany Austria Hungary
and Turkey by the allies.
These regulations will apply TO the
discount by federal reserve banks Of
acceptances which are based on the
importation and expectation of goods.
The limit of the amount Of accept
ances which may be discounted Will
be increased from so per cent, the
amount in force at present, TO 100 per
cent of the unimpaired capital and
surplus of the member bank from
which the discount is made.
Through this action there will be
made available just double the capt.
tai for financing expectations as is
available now. That this additional
assistance is essential to the proper
development Of trade in new fields
abroad is generally accepted in COM
mercial circles.
Congress. in the closing days OF the
last session. passed a bill amending
the federal reserve act TO accomplish
this increase. Pres't Wilson signed
the bill on March 3. The regulations,
which now are in the course of prepa-
ration, will be similar TO those issued
on Feb. 5, reserve board circular No.
5, except that permission will be
granted to banks to accept the double
amount OF the paper.
1t is provided by the administration
that any federal reserve bank may
discount accaDraDppS which arc based
on the importation or expectation of
goods and which have a maturity OF
not more than three months. They
also must be Endorsed by at least one
member bank. The aggregate of this
paper bearing the signature or in
dOrsement Of any one person. com
pany. firm or corporation rediscount-
ed for any one bank shall at no time
exceed 10 per cent of the unimpaired
capital and surplus of the bank This
restriction is not to apply. however, to
the discount of bills OF exchange
drawn in good faith against actually
existing values.
The Regulations
ANY member bank may accept
drafts or bills of exchange drawn up
on il and growing out of transactions
involving the importation OF expOrta-
ton OF goods having not more than
SIX months sight to run" according
10 the amendment, but no bank
shall accept such bills 70 an amount
equal TO any time in the aggregate to
more than one-half OF its paid up and
unimpaired capital stock and surplus.
except by authority OF the federal re-
serve board. under such general regu-
lations as said board may prescribe,
but not 10 exceed the capital stock
and surplus OF such banks, and such
regulations shall apply 10 all banks
alike. regardless OF the amount OF
capital stock and surplus"
BY this provision exporters viii be
able 10 get sufficient financial backing
from the federal reserve banks to
swing large expectation transactions
without the embarrassment OF having
all their money tied up for a long
period. As "a rule the purchasers OF
American goods abroad insist that
they be allowed time in which to pay,
so. with large amounts of money tied
up. the Americans would find them
selves crippled in future work. II is
20 avoid this that the scheme has
been devised 20 discount the accept
ances
Opinion prevails among the MEM
bers OF the federal reserve board that