New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-20

terms Subject only 10 the provisions OF
the Federal Reserve act and Of the reguls-
lions of the board made pursuant there,o'
any state bank becoming a member OF the
Federal Reserve system is authorized To
retain It's full charter and statutory rights
and 20 exercise all corporate powers grant
ed TO il By the state. provided that no
Federal Reserve bank may discount Tor
such member any paper OF a borrower
who is liable 70 the member bank Tor
more than 10 per cent of its capital ana
surplus. There is also n provision making
IT unlawful for any officer or agent OF such
a bank TO overcertify a check.
I. EXCHANGE OR COLLECTION
PROVISIONS. - Section 10 has been
amended to authorize Federal Reserve
banks 10 receive from non-member banks
or trust companies deposits solely Tor the
purpose of exchange or OF collection. These
deposits may be received subject 10 the re-
qurement that the non-member bank or
trust company maintain with the Reserve
bank a balance sufficient 20 Offset the items
in transit held for its account.
The so-cslled Hardwick amendment, as
amended. provides that nothing in the act
shall be construed rs prohibiting mem
Der or a nOn-men:ber bank from making
reasonable charges, 20 be determined and
regulated by the Federal Reserve Board.
but not 20 exceed 10 cents per 500 or
fraction thereof. based on the total Of
checks and drafts presented at any one
time for collection or payment of checks
and drafts and remission therefor by cN-
change or otherwise. No such charges,
however. shall be made against the Fed
eral Reserve banks.
.. ACCEPTANCES.- The new law gives
power 10 the Federal Reserve Board to
authorize member banks TO accept bills of
exchange up 70 an amount not exceeding
100 per cent Of their paid-up capital stock
and surplus, provided that the aggregate
of acceptances growing out of domestic
transactions shall in no event exceed 50
per cent Of such capital and surplus. This
IS in substance n restoration of the orig
inal provision, which was omitted at the
time from the amendments Of September
:, 1915. through an oversight.
s. FOREIGN AGENCIES AND COR
RESPONDENTS Paragraph le) of Sec
ton II has been amended TO give the Fed
eral Reserve Board power 20 direct the
Federal Reserve banks 70 open and main
tain accounts in foreign countries. appoint
correspondents and establish agencies in
such countries under regulations 10 be pre-
scribed by the board. Any Federal Re-
serve bank has also been specifically au-
thorzed. with the consent Of the Federal
Reserve Board. TO conduct any transactions
authorized by the section through another
Federal Reserve bank which has opened
such account or appointed such foreign
agent or correspondent. under regulations
to be prescribed by the board The effect
Of this change ia 70 authorize in terms ar
rangements which have already been made
between the various Federal Reserve banks
and 20 place such arrangements under the
regulations of the Federal Reserve Board
:. FEDERAL RESERVE NOTE ISSUES.
Section Is has been amended 70 author
ize the issue Of Federal Reserve notes
against notes, drafts, bills OF exchange or
acceptances acquired under Section Is Of
the act. or bills indorsed BY member bank
purchased under Section If. or bankers
acceptances purchased under Section Is, or
gold or gold certificates. This consists Of
the addition of gold and gold certificates 10
the paper against which reserve notes
can already be issued The gold or gold
certificates held as such collateral under
the new law will be counted rs part of the
gold reserve which the Federal Reserve
Bank is required 10 maintain against its
notes in actual circulation. This change
viii result in all outstanding Federal Re
serve notes being shown as a liability Of
the Federal Reserve Bank and Of gold or
gold certificates deposited with the Federal
Reserve agent being included among the
assets of the bank. There is a further
provision that gold deposited with the
pose Of redeeming outstanding Federal Re-
serve notes shall be considered as If col
lateral security on deposit with the Federal
Reserve agent There is another provision
requiring Federal Reserve notes. gold gold
certificates and lawful money issued 10 or
deposited with any Federal Reserve agent
20 be held in the joint custody of himself
and the Federal Reserve Bank under regu-
lations 20 be prescribed by the board.
3. GOLD SETTLEMENT FUND.-Sec-
ton Is has been amended by adding a new
provision authorizing the Secretary Of the
Treasury TO receive deposits Of gold coin
or r~id certificates when rendered 20 the
treasurer or ans assistant treasurer by any
Federal Reserve bank or Federal Reserve
agent This provision specifically author
ICES rrd provides for the conduct Of the
Gold Settlement Fund. which has hereto
fore been handled by the Federal Reserve
Board under is general powers.
9. DEPOSIT OF GOVERNMENT
BONDS.-Section l. has been changed in
order 20 repeal the provisions OF law re-
quiring national banks 10 maintain a mini
mum deposit Of government bonds with the
Treasurer Of the United States. The pur-
pose Of this amendment is % simplify the
retirement Of national bank notes and the
selling Of the United States , per cent
bonds securing. circulation under the pro-
visions OF Section IS.
10. RESERVES Section 10 has been
amended b. reducing the reserve required
to he held by member banks. as follows
Country banks. per cent OF demand de-
posts and 3 per cent Of time deposits
Reserve city banks, 10 per cent OF demand
deposits and 3 per cent Of time deposits
central Reserve city banks. - per cent Of
demand deposits and per cent Of time
deposits. All Of the above are 70 be kept
a an actual net balance on deposit with
the Federal Reserve Bank. The effect Of
this amendment is 20 eliminate the neces-
sity for member banks carrying any part
OF their reserves in their own vaults as a
matter Of law. and also 20 reduce the re-
quired reserves from u per cent Of de-
mand deposits and 3 per cent of time de-
posts for country banks. - per cent Of
demand deposits and per cent Of time de-
posits for Reserve city banks. and IS per
cent OF deposits and per cent Of time de-
posts for central Reserve city banks.
II. FEES.-Secton % has been amend
ed - as specifically 20 authorize directors.
OFFICERS. employees or attorneys Of member
banks 20 receive the same rate Of interest
a. is paid 20 other depositers for similar
deposits and 70 permit commercial paper
executed or irdorsed by directors or sttor
neys cl such banks 10 be discounted with
the bank upon the affirmative vote or writ,
ten consent Of az least a majority Of mem
he Of fta - =