The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-05-01
Development Of systen,.

81, is the purpose OF the Federal Re-
eer,e Board TO have the collection sys-
,ein developed so as to embrace the
collection Of all checks on non-member
banks and private banks. and while this
canno. be done Immediately. steps Will
he taken to afford these facilities as
rspidly as possible. The Federal reserve
banks will prepare a par list OF all nom
member banks TO be revised from time
10 time. which will be furnished IA
member banks.
Immediate credit entry upon re-
ccipt subject to inal payment will be
made for all such items upon the 0
Of the Federal reserve bank at full
face value, but the proceeds will not
DC counted an reserve nor become avail
able TO meet checks drawn until actually
collected In accordance with best practice
now prevailing.
80. Checks received by a Federal re-
serve bank on its member bank will be
forwarded direc. TO such member banks
and will not bc charged to their ac-
counts until advice OF payment has been
received or until sufficient time has
elapsed within which to receive advice
OF payment.
20. In the selection OF collecting agents
for handling checks on non-nrember
banks member banks will be given the
preference.
~. Under this plan Federal reserve
banks viii receive at par from tneii
member banks checks on all member
banks and OF non-member banks whose
checks can be collected At par by any
Federal reserve bank. Member bank.
will be required by the Federal Reserve
Board to provide funds to cover at pa
all checks received from or for the &C
count Of their Federal reserve banks
Provided. however. that a banl
may ship Lawful money or Federal re
serve funds from lite own vaults at TN
expense Of its Federal reserve bank t.
cover any deficiency which may arise b.
cause OF and only in the case OF In
ability to provide items TO Offset check
received from or for the account OF IL
Federal reserve bank.
Reserve Act Quoted.
~. Section 10 of the Federal rcscrv
oct provides that
The reserve carried by "a member
bank with q Federal reserve bank
NAV, under tho regulations and sub
jcct to such penalties as may be pre-
scrihcd ry the Federal Reserve Board.
BE- checked against and Withdrawn by
such member bank for the purpose OF
meeting existing liabilities. Provided.
however, mat no DAUk SHdI NJ any
time make loans or shall pay n divi-
bends unless and until the total re-
serve required by Law is fully re-
stored.
at Is manifest that items In process
% collection cannot lawfully be counte
as reserve either by a member ban
o. by = Federal reserve bank, Thsrt
fore. should "A member bank dra'
against such TENS the draft would b
charged against It's reserve II such RI
serve were sufficient In amount to pa
u: but any impairment of reserve
would he subject to all tho penalties pre-
vded by the act.
"1nasinuch as II II essential that q
law In respect to the maintenance {
required reserves 10y member banks eha
he strictly compiled with tho FEEDER;
Reserve Board will Ak a penalty to I
imposed upon member banks for ei
croaching upon their reserves.
Member banks car at all times q
range to keep their reserves intact /
red!scounting with their Federal reser
ia X
70, Each Federal reserve bank ",
determine by analysis the amounts
nncollected funds appearing on It's bool
10 the credit OF each member ban
Such analysis will show the true stat,
Of the reserve held by the Federal r
serye bank FOR each member mi AZ
VII enable u 10 apply the penalty 4
impairment Of reserve.