New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-20
Amendments to
Federal Reserve
Act Analysed

The Federal Reserve Bank of New
York issued yesterday an analysis of
the amendments TO the Federal Re
serve act which have been passed by
Congress and only await the signature
Of the President 10 become operative.
One of the most important changes in
the law has TO do with reserves. all of
which will in the future be kept on
deposit with the Federal Reserve
banks. Putting this amendment in OPP
Grafton, it was stated. will entail
considerable shifting Of reserves, but
an effort will be made TO give the
banks plenty of time to make the trans
fers. so as TO accomplish it with the
least possible disturbance. 1t is esti-
mated that approximately s2O0,000,00O
now held in banks throughout the
country as reserves will be transferred
into the twelve Reserve banks.
The statement prepared at the local
Reserve Bank, covering the eleven
amendments, says:
l. BRANCH BANKS Section has
been amended 70 make clear the authority
of the Federal Reserve Board TO either
hermit or require Federal Reserve bank
10 establish branches. The old law pro-
vided that each Federal Reserve bank shall
establish branches. which gave some doubt
as 10 whether this language was mandatory
or permlssive.
This section has also been changed to
provide for the management of such
branches as may be established by board
of directors. 10 consist Of not more than
seven or less than three. The old law
inferentally required that such boards
should consist OF seven directors. The new
law requires that majority OF one Of
such board shall be appointed by the bank
and the remaining directors by the Federal
Reserve Board, and that all the directors
shall hold office during the pleasure OF the
hoard The requirements that the directors
shall possess the same qualifications as
directors of Federal Reserve banks and
that one Of the directors shall be desig-
mated as manager Of the branch have both
been eliminated.
.. CLASS c DIRECTORS AND DEPUTY
FEDERAL RESERVE AGENTS Section
of the act has been amended 10 eliminate
the appointment Of one of the Class {
directors as deputy Federal Reserve agent,
this position being in effect abolished. In
stead the Federal Reserve agent Is author
lied subject 20 the approval OF the board,
TO appoint one or more assistants. who
have power TO act II his name and stead
during his absence disability. The Fed
eral Reserve Board retains the power TO
appoint one Of the Class directors as
deputy chairman Of the board of directors
Of each bank.
3. STATE BANK MEMBERS Section
has been changed 10 make more specinc
the terms upon which state banks and
trust companies may be admitted 20 mem
bership. The principal changes in this re-
gard are those resulting from enacting
into law many of the provisions concern
ing state bank membership. which have
heretofore existed merely as regulations of
the Federal Reserve Board. such as the
provision authorizing n state bank or trust
company 10 withdraw from the Federal
Reserve system. which is now fixed at
after six months written notice, subject
TO certain limitations OF the amount OF
capital stock of any Federal Reserve bank
which may be withdrawn in this manner
IN any one calendar year. Such banks will
also under the new law be required 10
make reports Of condition mot less than
three annually TO the Federal Reserve
Rank. instead of 10 the Controller. as here
tofore The member banks will also be
subject 10 examination. made by direction
OF the Federnl Reserve Board or by the
Federal Reserve Bank. except when the
examinations of the state authorities
approved by the directors OF the Federal
Reserve Bank.
The retention 81 their charter powers by
such institutions Is also provided for in