Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-06-20
PROPOSED CHANGES IN
FEDERAL RESERVE ACT
BY I A. FLEMING.

serve law which have been enacted and
now await the Presidents signature
are expected to pave the way for very
large additions to the banks In the
federal reserve system.
Section 8 provides for the establish.
ment of branch banks by any federal
reserve bank in it's reserve district
The management of branch banks I:
not less than three nor more than
seven members. of whom a majority
will be appointed by the federal re-
serve bank OF the district and the re-
serve board.
The provisions covering examinations
reports of conditions and reports OF
dividends of state banks entering the
provide for not less than three reports
year on call of the reserve board
Directors of the federal reserve bank
OF the district may accept examina-
tons made by said authorities and re-
ports submitted to them in lieu of ex-
animation and report by the examiners
OF the reserve system. The board may
also order special examinations when
necessary.
To withdraw as a member of the fed
eral reserve system a state bank would
be required to give six months notice
In writing to the federal reserve board
A federal reserve bank might not
cancel in any one calendar year more
tha9 Is per cent of it's capital stock
for the purpose of permitting with
draw ais of member banks.
The privilege Of discount operations
OF said banks with their federal re-
serve bank. the state bank in each
case will be required to certify or
guarantee to the federal reserve bank
that the borrower Is not liable to it
in excess of 10 per cent of its capital
and surplus.
permission is given to member banks
or on.member banks using the clear
ing facilities of the federal reserve sys-
tenn to make a charge not exceeding
~ cents per 800 on checks and drafts
ofawn on themselves and presented for
coilectfon by exchange or otherwise.
Inese charges will be subject to regu-
lauons OF reserve board and the maxi
iected against federal reserve bank.
one amendment authorizes the re-
serve board to- permit national banks
TO accept bills of exchange to 100 per
condition that not more than 20 ner
cent or the acceptances may arise out
or domestic transactions. The bank
may not accept an aggregate for a firm
OF corporation OF more than 20 per
An amendment permits the federal
reserve board to require a federal re-
serve bank to maintain accounts and
agencies in foreign countries for the
purchase and collection Of bills Of ex.
change. etc. Established agencies will
be available for use of other federal
reserve banks
The provisions regarding federal re-
materially altered
A member bank may, in addition to
commercial paper, present to the fed
eral reserve agent gold or gold certif-
Gates as collateral for reserve notes.
against notes may be counted by the
reserve bank as part of its gold reserve
the minimum Is 40 per cent, which
the bank must hold against these out
standing notes.
Reserve bank receiving the notes is
sued by another reserve bank it shall
Forward them either to the issuing
bank, or. on the latter's notification, to
the treasurer of the United States.
A provision that q redemption fund
of at least per cent must be kept with
the treasurer of the United States by
the issuing bank il changed to a per
cent OF the notes Issued. less the gold
or gold certificates. II q reserve bank
issues notes after its gold reserve is
found below 40 per cent the federal re-
serve board will charge interest on the
excess
The provision relating to reserves
against deposits has materially
changed. Immediately on the approval
o. the law the amount of reserves COM
pulsorily terminated to. be kept by q
member bank Is Increased from per
" yer cent on the demand de.
posts of country banks: 6 to 10 per
cent reserve city banks and to IL per
cent on central reserve city banks.
Cash In banks vaults under the pro-
u. is and Is per cant tor the three dif-
ierent classes of banks to z, 10 and IL
per cent, respectively, and 1t will be
necessary Tor banks to carry all re-
CURED reserves with the reserve banks.
directors or officers are forbidden to
receive fees. commissions, etc, arising
out of transactions in which the hank
~ party. He may be permitted to re-
ceive interest on deposits and to dis
count notes. etc. on the approval of a
majority Of directors
Local Securities.
Washington Gas sold quite freely on
today's session of the Washington
stock Exchange at Is. 1t was the only
public utility stock in which orders
were executed.
A number Of ten-share lots of Nor
folk and Washington Steamboat stock
SOLD at 163 to 1874. with the last sale
at laa: The last previous transaction
Small sales OF bank stocks were re-
corded at 2zo for National BANK of
washington and 357 for American So
curity and Trust Company shares.
Capital Traction IS were Arm and a
traction better. with sales at 103
Southern Railway Earnings.
Earnings of the Southern Railway
company for the second week in June
we're $2.044.978 gross. compared with
S,l44-219 for the corresponding week
of last year, gain Of $30o.7eO. or 1924
per cent.
For the fiscal year to June u the gross
earning. were sloo.224.s1l., or an increase
responding period Of the previous fiscal
year.
Dividends Declared.
Directors Of the Merchants Transfer
and Storage Company have declared the
regulxr semi-annual dividend of 3h ner
cent. payable July l. Books closed June
This IL an increase of "a per cent for
the semi annual period or at the rate Of
per cent annually instead Of s per cent
formerly.
The regular quarterly dividend of >
per cent on the stock Of the American
Security and Trust Company Is payable
July 10.
Condition Of the Treasury.
Condition Of the United States Treasury
at close yesterday showed:
Net balance in general fund. S315,764,-
Total receipts. s2s,ss4.s23.
Total payments. $4.459.ssl.
e73. against deficit of S3l.34s,7 5s last
year. exclusive of Panama canal and pub-
lie debt transactions.
OIL STOCKS,