The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-10
STATE BANK RULES
ON RESERVE ISSUED
Provision Made for Withdraw.
al From the Federal Sys.
tenn on Notice.
PLANS FOR SUPERVISOR.

BENJAMIN strong. Jr., governor a. a.
Federal Reserve Bank % New Yo,s
made public Yesterday the rules ,o- M.
admission Of state banks and ,rus. com.
pa MES 10 the reserve system. Mr.. S'-o.,
said that a number ~ state instltu,io,.
throughout the country, outs de o, N.,
York, have signined an intention II a..
:ering the system under tho r.7
rules. 1t is understood that a vel
established trus: company In th's e.,
IL considering such a step.
The most significant regulation In n,
set Ia that providing a means o. p,,h.
the system on twelve months write,
notice TO the Federal Reserve Board.
In order that there should r. no rush
Of wlthdra walls In any one year which
might embarrass the reserve banks a, IA
provided that no Fedora, reserve bank
a cancel more han 10 per cent. o..
i;s stock in any one year withou, n,
consen. Of the Reserve Board Tho STAT
institutions upon Withdrawal Will b
paid their capital stock subscriptions 10
the reserve bank.
The absence from ne r.s~-. a.; o.,
any provision for withdrawal has bee,
one N me big obstacles IN the way o..
state bank participation. The rev regu.
lation, 1t - expected. will be tavo-ab,y
received by state institutions.
Another provision which will REP 4.
overcome the h~esitancy Of the Sats In.
%stitutions. II is believed. IL that In re-
gard TO examinations 81 harks. TIE
state institutions have objected 70 h.ins
put under a system OF Fedora sJar!.
nation as well as state supervision. r.,
new regulations say tina, tn order y,
avoid duplication tho board Wi ese.
else the broad discretion vested n 4 By
the act in accepting examinations q.
state banks and trust companies made
by State authorities wherever Trey az
satisfactory to ,he board and are found
to he OF the same standard o, Thor.
oughness as national bank eHan!ra.
tons"
Also the reserve bank Asrr'-r. NJ,
he designated 20 work IN coor.ra'ios
with tho examination star 81 'hs S',',
IN order TO attain uniformity n -,
standard OF examination.
The State institutions are -Tror.-.'
10 retain their full charters and wey
continue business IN the same Va" az
before admission. EXCEPT &c PROVIDED nv
the reserve act and tho regulations -
institutions are restricted 70 .o3rs -
real estate and mortgage o-'r 20 ~
extern, thai their liquid condition al M
he impaired
The institutions are required - a''is
loans secured by their own S'o"S n
loans 20 any one person ~ 'rr1 b" ~
cess OF 10 per cent. o. capital ar' 81
plus or 40 per cent. o, capital a~! -"7
estate loans which IN the Judgment r.
the reserve hoard might Impair TO
liquid condition.
Charles :. iiaml,n ot the r',s,'
hoard. IN a statement as :" '.. -..'
says;
"Apprec.atirg fully that ~ s'''
OF the Federal reserve system Oh y
measured by the quality ari ,..-. 20
OF its members rather thai . '.r
number. the Federal Reser'~ i.rfr'
prepared 10 use the hro.d G.S-""'."'
power vested In n by the Federal -
serve act TO hr.rg about this '"",a H''
on the basis ~ equity and prir' o.
The hoard has sought 'r '.' peg
lions governing the 1dW.sS..' ~ So
banks and trust companies H' '
pended. first, 20 esttN'~N o'.' "
sonah'e standards o.. 1lr-Su' w
he generally recognized SIS ra p
protect tho Federal reserve ~.,'.w '
the national banks, Mos" ~.. IN
N the system - ohlc t'o"'. - -s 80
admission Of any bank W.''1 '.
a source OF weakness PATH. 'ft" Z
strength and, second, 20 prov. -.
Hl.a .