Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1915-02-13

ulations indicate how banks may avail
themselves OF the aid of the federal
reserve banks in securing the redis-
count of such paper and lay down the
lines by the reserve banks themselves
will be guided in purchases of accept
ances in the open market. Before the
federal reserve act was passed do
mestiC dealings In acCeptances were
confined to state banks, trust COM
panies and private banks. How far
American banks now may proceed in
taking away from London a share OF
this business, a considerable part OF
which is done with South America,
officials here do not now pretend to
know.
Although under today's regulations
the reserve banks are not barred from
outright purchases of acceptances, the
board indicates a present preference
for discount of such paper presented
by member or other banks. The board
announces that acceptances must be
payable in dollars, in the United
States" a step toward making the
dollar at least one of the mediums of
international exchange.
Plans to BE Extended
Weeks have been spent by the
board in preparing the resolutions and
many conferences have been held with
the advisory council, some of the gov
ernors of federal reserve banks and
the federal reserve agents.
THE acceptance is still in its in
fancy in the field of American bank
ing" the board says in a circular
How rapid its development viii be
cannot be foretold, but the develop
ment itself Is certain. Opportunity Is
I,,yt gt tn az
sst the movement in this new direc-
tion."
The circular adds that present regu-
lations are to be regarded as a first
step, to be extended as circumstances
warrant.
The acceptance is the standard
form of paper in the world discount
market" it continues. "By reason Of
Its being readily marketable, it is
widely regarded as Il most desirable
paper in the secondary reserve of
banks, and will help to provide an eff
fective substitute for the call loan
Its growth, however, Will depend upon
the ability OF the American market
to adjust its rates effectively to those
prevailing in other markets for paper
of this class
Federal reserve banks may, from
time to time, submit for the approval
of the board maximum and minimum
rates within which they desire to be
authorized to deal in acceptances
within such limits and subject to such
notifications as may be imposed by
the board, federal reserve banks will
be allowed to establish the rates at
which they will deal in acceptanc6s."
Endorsements Preferred.
The board says preferential treat
ment should be allowed on accept
ances bearing the Endorsement OF
member banks and will sanction such
a preferential, but points out that fed
eral reserve banks which desire to
purchase such paper not so indorsed
may do so, though they should re-
strict operations to acceptances bear
ing some other signature than that OF
the drawer or acceptor, preferably
that of a bank or banker.
An acceptance, the regulations say,
must bear or be accompanied by evil
dence satisfactory to a reserve bank
that 1t originated In an actual bona
fide sale or consignment involving i'm
portation or expectation OF goods
I'm framing their policy with re-
spect to acceptances," SAYS the board,
federal reserve banks will have to
consider not only local demands to be
expected from their members, but also
requirements to be met in other dis
tricts. The plan to be followed must
in each case adapt itself TO the con-
stantly varying needs OF the country"