The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1920-11-14
RFDISCOUNTING
TO HELP BANKS
While Money Is Tight,
Bank Officials See
Bright Day Ahead
MUST PROTECT LOANS
rederal Reserve Board Will
Re Asked to Scrutinize
Paper for Financiers

oErAIDMA CITY, Nov. Ia
rr,d a. Dennis, bank com missioner
- OL,fumt, in a. statement made
.,,hi, .uicht, answered two ques-
poys rl.lrding the financial .condi-
S,or of the state. The questions.
,bI,h 81, said had been put directly
n him. we're:
Fir,. wat Is the most ressona BILE
v,y D. uftug the financial condl-
,0n o.. oklahoma back to normal? =?
Id
lseeord what Is the best way to
~ a .tautaCe of our financial sys-
Nem 20 . to ret the greatest benefit
f5r be state IN the future?
Answering the first question"
aid the statement prepared by Mr..
Dennis tn, credits or the country
we're advanced during the period
Of the ntr The lowering of the
prlces Of bo commodities which we
have t1 .u.u necessarily requires the
reduction OF credits, as the re-
sources 0t financial institutions will
be curtalcd in proportion to the de-
cre3s" ~ the price Of commodities
~ hls been estimated that with n
80 per cent decrease I'm the price Of
commodities that the deposits OF the
banks will shrink IS to 80 per cent.
and Ike per cent of loans will
necessarily have 20 be collected and
% addition 10 this whatever money
yls borrowed by banks to make
Present. loans. With the reduction
e' per cont of the loans and
fough more to pay the borrowed
Indebtedness banks will go into the
.ew year IN good financial condition.
with their borrowing ability avail.
.5le for use during tho dull sum-
Ier season, wherein production is
the process Of development.
Banks win Collect Money Due
Briefly this means that banks
"IlI have tu collect enough TO pay
heir borrowed money and about o5
per cent more in order to take caro-
he shriukago in their deposits"
In regard 10 the second question
70 how TO take. advantage of the
Yates financial system to get the
realest benefit for the state i'm tho
uture, Mr.. Denis said he believed
his can bcs be done by both state
nd national banks MAKING loans
hat Will meet the requirements OF
ne FEDERAL reserve banks as to elip.
1ility." ~ zig
In summing up his statements
aid: D'''"iS
bnetly, the way TO get the great
~ oeheIit from our financial sys-
EN- IN the future for this state tx.
=, fIrst-All banks should confine
.nemseVes to : eligible paper and
,Pee the paper by proper finan-
.h' saternenis or certified comics
GhaU"l mortgages at the time
.he iCan Is made, and for state banks
70 oiter only this character of paper
tW rediscount at their correspondent
ol"hs' Where 1t in turn can be used
men correspondent banks with
IN oe passed along without any in
,o%th credits as Eligible paper only
,n,vuerdI 20, tvuerdI reserve bank. Avoid
'omnnehience TO the central banks.
eecohl--A.l national banks and
banks which are members ~, th ~
FEDERAL reserve bank system Sho,,id
us,ount their notes directly with
me FEDERAL reserve bank and nor
uG mem 10 their correspondent
ulnkS This process brings new
'"'N mo the state TO helm both
"o immunity In which the bank IL
,(a1eu ana tae community in which
VI, correspondent bank IL located f"
Nrf'y al notes OF. the country
uAuks Mr.. Daniels said. are eljgihle
raper or can be made so with a NJ
", tare and attention by the officers
,, Lhe statement then itemized yari-
GyIish".IS or eligible paper, simnar-
@'ns the items as follows:
-, -" notes acceptances and bills
ds,,H-I" I'Ee oftered by producers or
,-,, er ''I commodities of the coun-
"A F..4 III
s me federal reserve hank nrovjd.
x, 'he statements Justify /, or pro.
- me security offered is ample"
Nv.'a on real estate, stocks or
mus Nputside OF government bonds1
i,,any any ''in that Is made for use as
%, 'u capital or. speculation or
80. purpose OF permanent invest
",I are not acceptable bv tho fed.
ens, uai reserve bank and should he
'o'ue'. except to a limited extent
,in % ,'hhISsioner's statement con-
.., CHler the state lawy' Mr.. Dennis
iSrI state hanks are permitted 10
Per cent Of their capital 10
a, '',s'. borrower, but state banks
'hsir present time should confine
can't '"s ~ 10 per cent of their
ttl.A. aud surplus for tho renson
Una, ih.' Is all bank under tho 90
g.al r'sese law is allowed ~ al.
one t Hd when a loan is made to
~ ~ ,s S,. "cr In excess OF 10 per cent
hs,, '!pliai and surplus OF tho
- H iact alone renders this
'o,e inrI- -ible." '''''
n.r, M hgnnls concluded his state
,,,It per cent reduction OF the
,no,,,, 'Ahns in oklahoma and
houEh more to make II possible FOR
Hrs,D'aLN Me- DaLNs 20 pay their borrowed OBJ
ss. ..o. ons could not in the face az
s,,S1 Tow confronting US work
g. .,uaN'' ON the borrowers OF the
va Any persons entitled tn
,Sa. 90. m lhe first place could not OBJ
@ 80, 20 reducing his borrowed obll-
N, NJ, IL. per otnt when It is appar-
~ W. W,i.". II !s necessary for tho banks
n74ldate their loans So as n be
in Sa,.g.,S.eping with the reduction
Il IlNInA nnr=