Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-06-18
Interesting Addresses Mark Closing Day Of North Dakota Bankers Convention

out OF the time deposits Of the banks,
to be thus employed.
~. Member banks, in this state
particularly, that during the past few
years have been doing a very valua.
Bile work in encouraging better farm.
ing and a greater interest in live.
stock, have been afforded a great deal
of. support in work OF this character
through the very liberal provisions Of
the Act. with reference to the redis-
count of agricultural and livestock
paper.
-. The drafts OF any member bank
on the federal bank Of its district
are payable at par at any other re-
serve bank in the United States, with.
out exchange.
-. The new reserve requirements
are lower than the old requirements.
After November l6, 1917, when the
new reserve requirements are fully
operative, country banks will keep
only 4 IL of their reserve in their
vaults and it will be optional with
them to keep the difference between
this amount and the amount they are
required to keep with the federal
bank, either in their own vault or in
the federal bank. The disposition
will probably be to keep q substan'
tial part OF this optional amount in
the federal bank vaults, with the re-
suit that member banks will not. be
obliged to carry the same amount Of
cash as formerly and will make a
saving in burglary insurance. in addi-
ton to which they will considerably
reduce their risk.
The benefits I have enumerated
mean that every banker can go home
at night with a feeling Of security
that nothing can occur that will sud.
denly %endanger the safety and solid.
ity of his institution. This element
Of protection alone is worth all the
effort it has taken to reconstruct our
banking law.
Country Banks.
AT q recent banking meeting ! was
asked whether | believed that it was
good public policy for country banks,
because of the Federal Reserve Act,
to sever their old time relations with
their city correspondents, withdraw
their city accounts and no longer util-
ize the facilities that have been built
up through years OF association with
large institutions in the commercial
centers?
Such a question seems to me some
what absurd. We must 60 back again
TO the principles that stated earlier
in my talk to you. The success OF
the federal reserve banks will depend
almost entirely, in my mind, on their
cooperative relationship with their
members and upon the service they
can render to their members and to
the public. The federal reserve bank
has been established for the use of
member banks. No one has supposed
that it would be the disposition Of
it's officers to force members to avail
themselves Of its facilities upless the
members found satisfactory reasons
for. doing SO. If the federal reserve
bank is to transact an extensive bust
ness it must be upon a strong basis
There is no doubt in my mind Blu
that a satisfactory volume of. bust
ness will come to it in time as it j
better known and understood. l dt
not apprehend, however, that this viii
necessarily interfere sc greatly witt
the old relations between banks ant
their correspondents. Upon the 9th
or hand, | think we will find Oul
proper sphere OF activity and will &C
quire the volume OF business that is
necessary to provide for tho ex
penses and dividends of the federal
bank without difficulty and along lines
which will not be found to be com
p~etitive either with the banks in the
city or the member banks in the
country.
Banks over the Ninth district will
continue to have the same relations
with their city correspondents as be.
fore, except that there seems to be
an impression that accounts in east.
ern centers will be closed, with the
result that the money will be brought
home, either for local use or for de-
post with nearer correspondents.
Since it was organized the Ninth Fed
eral Reserve bank has done a salts.
factory volume Of rediscounting for
it's members. The large banks in the
great commercial centers may easily
find in time of stress that the feder-
al reserve bank Is of just as much
help to them as to any of its mem.
i5ers. Their ability to quickly obtain
currency from it, will he reflected in
the better ability to serve their cor
respondents than before, and the net
result will be that the country bank
will have a better field in which to
obtain accommodation"