The Richmond palladium and sun-telegram., 1919-05-23

banks, and from other reserve banks. /
OBJ They must honor checks and de- /
mand drafts from their respective
member banks and from other re-
serve banks.
(c) They can open accounts with I
other reserve banks and can estab-
lish in foreign countries. with the per-
mission of the reserve board.
I'D Branch banks may be estab-
Iished in each district. At present !
there are branch banks at Cincinnati. !
Pittsburgh, Baltimore, New Orleans,
Louisville, Omaha, Denver, Ell Paso.
Salt Lake City.
May Redlscount
(e) They may rediscount, 1. e. pur-
chase, commercial notes, drafts and
bills of exchange sent In by member
banks.
(f) They can make fifteen day loans
secured by pledges OF bonds or other
commercial paper.
(g) Subject to review by the re-
serve board, the reserve banks may
establish rates of discount.
CHI They may issue Federal Reserve
bank notes.
Cd They may issue Federal Reserve
notes.
I'D They can buy and sell in the open
market, at home or abroad, cable
| transfers, bankers acceptances and
bills Of exchange.
| (k) They may deal in gold coin or
bullion, at home or abroad.
| O They may deal in government
or municipal bonds.
(m) They may buy bills of ex-
change, from member banks, and sell
| them.
The Federal Reserve Board has al
most unlimited power over the mem
ber banks. The principal powers and
duties are:
j (a) To levy assessments on the re-
serve banks to pay the expenses OF the
board.
/ (b) To make an annual report to
congress.
(c) To examine member banks, and
to publish weekly statement of the
condition of the reserve banks.
(d) To require one reserve bank
to aid another in need of cash.
(e( To suspend any reserve require
ment for thirty days, and to renew
suspension for fifteen day periods.
. VI 10 regulate ISSUE anu lCtiAO-
ment OF reserve notes.
reserve cities.
(h) To suspend and remove any Of
, ficer of a reserve bank.
Q) To require the removal of worth
less assets from the books of reserve
banks.
Other Powers
G) To suspend, abolish or reorgan
,, ize a reserve bank for due cause.
(k) To require bonds Of Federal Re
serve Agents and to take other pre-
cautions.
ID To permit national banks to act
as executors, trustees, registrars, etc
(m) To employ necessary assist
ants, etc.
(n) To act as clearing house or tc
require reserve banks to do SO.
(o) To define character of paper
that may be rediscounted.
(p) To fix rates Of interest on re
serve notes. No interest is charged
! "a 70 fix theAsalaries Of bank ez
: aminers. -
: (rl. To exercise general supervision
Z over reserve banks.
!, This clause in the act grants pow
: er not specifically provided for other
wise.
: The Federal Reserve Act gives t
: national banks certain privileges no
. enjoyed under the National Bankin
l Act. With permission of the reserv
? board, any national bank with capita
! and surplus Of a million dollars @
i more may establish branches abroad
or, two or more banks may combin
and establish branches in foreig
. countries. Member banks may max
: Scceptances based upon foreign an
2 domestic shipments of goods and VI
2 on warehouse receipts. providing tn
= total does not exceed one half {
- the banks capital and surplu
- National banks in towns of less tha
:, five thousand population may act q
= = insurance agents under regulation
: prescribed by the Comptroller of tt
- = Currency. Greater freedom in ma
q ing loans was an advantage whie
:. = the state banks had over nation
- banks under the National Bankfr
Act. The Federal Reserve Act 6
of lows national banks outside of tt
o1 central reserve cities to make loal
on not to exceed five years on far
,s. land, within hundred miles of Il
IT. Dank, OF 10 IOdDS III ISSiIICtS
he amounts not to exceed one year {
.s- real estate other than farm Ian
10 within the same distance.
ir Under the National Reserve Az
of national banks in central reser'
en- cities New York, Chicago and
lis Louis) and reserve cities had to CO
ed ry a twenty-five per cent reser'
OIL against time and demand deposi'
en- and country banks, that Is. ban
ar outside of reserve and central l
as serve cities, had to carry a fifte'
he per cent reserve. AS a part of t
.er required reserve, banks might cou
the five per cent redemption fund
re- posted in the treasury agaist o,
Id standing circulation. Now all ban
18th must maintain a reserve of only fl
at per cent against time deposits. Tir
M deposits are those which are subje
Gil to not less than thirty days noti
lal before payment. All other depos
are called demand deposits. Cent?
reserve cities must keep an eighte
cy, per cent reserve against demand {
Va posits. OF this amount, one-thi
'er must be in their own vaults, seve