New-York tribune., 1920-09-20

vances on current account against the
security of (a) stock debentures or
ollls, having not more than six months
to run Of the Union government or of
local authority in the union.
(D) Gold coin or bullion or the docu-
ments s9entso ttehlating to the shipment or
(c) Such notes, drafts, bills Of ex-
change, and bankers acceptances as are
ehglb!e for purchase by the bank.
Fifth. 1t may effect transfers by tele-
gram or letter. buy and sell sight
drafts, trade acceptances, bankers &C
ceptances and bills Of exchange drawn
In or on places abroad.
Sixth. (a.) 1t may buy and sell stock,
debentures, bonds and bills having not
more than six months to run Of the
| Union government and Of local au-
thorities in the union.
(D) 1t may invest a sum not ex-
ceedlng its paid-up capital and reserve
IN securities having not more than two
years to run of the Union government
or other governments.
Seventh. 1t may buy and sell Sc
eurities for customers.
Eighth. 1t may buy, sell or deal in
precious metals and contract for loans
OF gold or bullion.
Ninth. 1t may accept the custody
and management Of moneys, securities
and orher articles of value.
Tenth. 1t may open accounts In for
eign countries and act as agents or
on business in or outsirde the Union.
Business Is Limited
The bank, however, will be expressly
deferred from engaging directly in any
business, except as indicated in the
foregoing regulations, from purchas-
ing bank shares or making loans
against them, from making unsecured
loans, from accepting fixed time de-
The bank shall have the sole right to
issue notes in the Union for period
Of twenty-five years. The notes shall
be secured by 40 per cent in gold or
gold specie In the custody Of the bank
and as to the remainder by commercial
paper and trade bills, and the notes
shall constitute a first lien on all the
assets of the bank. The bank, more
over, will be required to carry q gold
reserve Of 40 per cent against deposits
and notes outstanding. Member banks
of at least l3 per cent of their demand
deposits at the Reserve Bank after
three years, but until then the mini
mum will be 10 per cent. Banks with
notes outstanding will be required to
maintain special reserves against them.
In commenting on the new scheme
the Standard Bank Of South Africa
has this to say:
"1ts objects are to conserve the
specie supplies Of the Union by pro-
! viding for the issue Of gold certih-
Gates, to provide for the establishment ut
Of a Central Reserve Bank for the
Union and to regulate the issue of
bank notes and the keeping of reserves
with view to securing greater sta
bility in the monetary system Of the
Union"
Special surveys of the American sys-
tenn in practice have been made for
the Union government. One of the
important links in bringing the Amer
lean banking ideas to the Union has
been r. f. Saunders, agent in New
York Of the National Bank of South
Africa. He has been a persistent
booster Of the American system, and
has made reports from time to time
to his home country. He feels that
the Federal Reserve system has shown
us worth by having enabled America
to finance the war on an unprecedented
scale, and contends, too, that it is
again showing its worth in aiding the
country to pass unruffied through the
period of industrial and financial re-
adjustment