Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-06-25
AMENDMENTS TO RESERVE
ACT EFFECTIVE At ONCE
Steps to Place It's Provisions In
Operation Taken by Re-
serve Board.
STATEMENT ISSUED TO BANKS
Compliance Will Mako 1t Necessary
in Most Cases for Members to In
crease Their Balances With Fed
eral Reserve Institutions.

Stops to place in immediate operation
the appointments to the Federal reserve
act. which were approved last Friday
by President Wilson. have been taken
by Governor George J. Scay. of the
Fifth Federal Reserve Bank. and let
ters explaining the provisions Of the
amendments have gone forth to mem
Der banks throughout the Fifth Dis
trict. Especial attention is directed
to the provisions of the act establish :
Ing now reserves to he maintained with
the Federal institutions.
The Federal Reserve Board has just
issued an advance statement covering
this point, which is as follows:
Every bank. banking association,
or trust company which is or which
becomes 4 member of any Federal re-
serve bank shall establish and main
tain reserve balances with its Federal
reserve bank as follows:
IF not in q reserve or central re-
serve city, as now or hereafter de-
fined. 1t shall hold and maintain with
the Federal reserve bank of its dis
trict an actual net balance equal to
not less than Z per ccntum of the ag-
posts and per centum Of its time
deposits.
III in n reserve city, as now or here
after defined II shall hold and main
tain with the Federal reserve bank OF
Its district an actual net balance equal
to not less than 10 per centum of the
aggregate amount Of it's demand de-
posits and per centum of it's time
deposits
III in a central reserve city as now
or hereafter defined. IL shall hold and
maintain with the Federal reserve bank
or It's district an actual net balance
equal TO not less than l3 per centum of
deposits and per centum of its time
deposits"
MEMBER BANKS MUST
INCREASE THEIR BALANCES
Compliance with these provisions
Will make 1t necessary. in most cases.
for member banks to increase their
balances with the reserve banks, and
member banks are urged to make such
deposits promptly but with as little
disturbance to financial conditions as
possible, and to accomplish this OBJ
ject the cooperation Of all member
banks Is necessary. the board states.
and is sought to the fullest possible
extent.
1T is OF very great Importance that
member banks. in establishing the new
reserve required. should do so, as far
possible from their own vaults"
SAID Governor Seay lin order to avoid
any disturbance OF the money system.
AL the same time II is Of equal import
ance 10 transmit 10 the Federal re-
Sc re bank at once the gold and gold
certihcates which members can spare
from their own vaults which NAV be
required to establish the legal reserve.
ihis bank will Undertake TO nav
transportation charges upon gold GER
tihcates and gold coin sent to II he.
tween now and June 80 for the pur-
pose OF building up reserves to the
required amount. and gold coin will
De received at its face value unles,
mutilated. Under the act as II now
stands no member bank is required TO
carry any specified amount or quality
OF cash in vault as reserve The onIv
legal reserve is that required to be
maintained in Federal reserve banks.
currency Of any description will
therefore. now serve the ordinary muir.
poses experience has proved TO be nee
essary for daily operation. Subscrip-
tions TO Liberty bonds were very heavy
IN this district. and 1t is evident that
heavy demands will be made uuon Fed
erai reserve banks for loans in effect.
ing payment of subscriptions.
Member banks are, therefore urr.d
In their own interest and in The in
terests of the district and country 70
oNiid UP the gold reserve in the Fed
eral reserve bank and use for currency
purposes Federal reserve notes"