Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-01-23
RESERVE BOARD RULES
ON time" DEPOSITS
DESIGNATION Of Funds on Which 5
Per Cent Reserves May
Be Carried.
Declines to Handle Dangerous Sub
ject as to Bankers
Perquisites.
BY I. A. FLEMING.

The federal reserve board has founo
IT necessary to amplify its Tuh"s VI
November II, 1914. on time uepoei. -
and to make plain to bankers sehei
~ inst what its position is in the
matter of deposits upon which oahhs
need carry but per cent reserve.
The reserve act provides that oahhs
in the system shall carry a ni'h''huN'
of 5 per cent on all time
but the Interpretation of the term nt,s
heen made by some bankers in accor"-
ancc with conditions in their os
TO which the board objects.
The modification by the federal re-
Sarye hoard sets forth the toilo"ihs
facts: 49,.
"It 10 clearly not the intention OF tue
act to permit a reduction OF reserve "
/, per cent upon deposits when M Id.
ordinarily be checked upon. ouI , -,
spect to which a bank, by 4 oian M.
,,royision i'm its bylaws. may at any
I;re require a withdrawal notlce VI
not less than thirty days TO pc sisen
The reduction of the reserve 10 p
ried against time deposits Is itte,,
~ anniv only to deposits under "ritten
agreement not to be withdrawn WILL, h
thirty days from the GATE as VI rrars
the reserve calculation Is n,aue' sarre
fore on the date of calculating reese
nnder fhe definitions contained IN VI.
accompanying regulation, no Gep Sas
NAV be deemed a time deposlt. Whe - :,
on open account or on ces.i.h ncause
10 payable within thirty days peca .Sa'3
~ The approaching end of the spee,ieu g..
neriod for which it was deposIteu 20
because of receipt of notice OIL .ns ua -
on which withdrawal VIII os III Nth.
II II may be withdrawn by check :" III
in thirty days, although the naIlk nc ay
have the right, by written contrdGl VI
otherwise, to require wlthdra"ai No
tice Of not less than thirty days;
..Sor NAV any certificate of deposit
no considered time certihcate II aiis
mart of the amount represented oS ~ -,
subject to check or may De W,.nu nrtie-
without the presentation OF the I'm
cate for proper endorsement. ,y
.'WhiIe savings accounts may at any
time. by the action of the bank, pc con
verified into time deposits; h ,hey ale HE
nevertheless, ordinarily wlthdra" aoie
on demand. In the absence OF any
statutory limitation upon the sun,
which may be received by a oank ~ 81,
any. one individual as sa.iHs for
Cunt the board has no authority. lor
fhe nurpose of calculating reserves, ~
impose any such limitation. put ~ ho,h
strongly that in the interest," oI po.i'
the member banks and the 1eoerai re-
sarve system the broad provisions OF
the acf in respect to time deposlts. say
ings accounts. and certinca.es y, ~
posit should not be made the means -.
any large general reduction OF reSeIHe
by a transfer to those forms OF depos-
its which are in substance demand De
posits: and it is the purpose OF tne
board of countenance or perm. ~,
duction Of reserves to per cent OILY
on deposits which are: in MA iacI re as ton
as in form. entitled 70 sueh
within the spirit of the act
Banks carrying savings accounts
must record them In separate ledge,s'
which do not contain ordinary cnech-
Ing accounts or other items. open time
accounts and time certificates OF de-
post should also be carried IN sepaa
rate ledgers. but If carried In the same
ledger with current checking accounts
thev must be grouped together SO as
10 be readily distinguished from e'e
..rhe board desires to make ~ ciea
that the act requires the full reseIne'
at the rate prescribed for aem an ssy-
nosits TO he carried against an say.
Dos nuss's: accounts and all time deposits
Whether on open account or c er whieh
Wnicn has been notified are to be
'.i,hdrawn within thirty days