The Daily Alaska empire., 1935-09-21
THE BANKING ACT OF 1885 Approved August 23, 1895


 interrupted operation of the banking system through amendment of the Federal Reserve Act, reorganiza- tion of the Federal Reserve Board and technical amendments of the banking laws and by making Federal deposit insurance of bank deposits perma- nent.
 Reorganizes the Federal Reserve Board into seven-member board all to be appointed by the President and each to have the title of Governor and serve fourteep-y year term at $15000 salary Changes the of the Federal Reserve Board to the Board of Governors cf the Federal Reserve System" The Secretary of the Treasury and the Controller of the Currency eliminated from membership, officio, the board after February h. 1886 The entire organization of the board is to be effected by that date.
 Creates a Federal Open Market Committee, ef- fective March l. 1936 which shall consist of the seven members of the Board of Governors of the Federal Reserve System and five representatives of the twelve regional Federal Reserve Banks, to be elected annually by designated regions the com lmttee to have power to control credit fluctuations by purchasing and selling Government bonds, notes or other obligations of the United States on the open market through the Reserve Banks. The Open Market Committee is to have charge of open mar ket operations and the Reserve Banks must act in accordance with it's instructions.
 Amends Section IA of the Federal Reserve Act to make eligible for purchase by Federal Reserve Banks without regard to maturties, direct obliga- tions of the United States obligations fully guar anteed by the United States but provides that such direct and guaranteed obligations may be purchased "only in the open market"
 Retains existing statutory requirements govern ing maintenance of reserves against deposits as further check the of bank funds for specu- lation. Provides that by a vote of not less than four of the seven members of the Board of Gov ernors, the present requirements of T, 10 and 13 per cent could be doubled, but not lowered.
 Allows Reserve Banks to continue to propose changes in rediscount rates subject to board ap- proval but requires such rates to be restaed every fourteen days or oftener if deemed necessary by the board.'
 Authorizes the President to designate of the seven Governors of the Federal Reserve System to act its chairman" and another to serve as vice chairman, each for four years and gives the heads of the twelve Federal Reserve Banks the title |of President" instead of Governor" as not to conflict with the Reserve Board titles. The Presidents of the Federal Reserve Banks would be selected for five-year terms by the boards of di rectors of the banks subject to approval by the Board of Governors of the Federal Reserve System.
 Permits national banking associations to make real estate loans secured by first liens upon m- proved real estate including improved farm land and improved business and residential properties, up to 50 cent of the appraised value of the real estate offered as security for term of not over five years except in of amortized loans when 60 per cent may be loaned for a ten-year term. Forbids national banking associations to make such loans in an aggregate sum in excess of the capital and surplus of the bank, or in excess of 60 per cent of it's time and savings deposits whichever is the greater
 Broadens the eligibility requirements of paper upon which the Federal Reserve Banks may make loans. .eaiu VI R1
 Makes permanent the temporary law, expiring August 31 1935, fully insuring bank deposits up to 5000 for depositor. Provides that the annual assessment banks for insurance fund member ship shall be one-twelfth of l per cent upon their average deposits liability
 Requires all State banks with deposits of $1,- 100000 more to join the Federal Reserve by June l. 1922, if they desire to continue to have their deposits insured.
 Permits non-member banks to terminate their insured status within thirty days of effective date of the Banking Act of 1895 by giving written notice to the Federal Deposit Insurance Corporation
 Provides that the total amount of the securities of one issuer obligor held by national banking association for its account shall not exceed 10 per cent of the actually paid-in and unimpaired capital stock and surplus fund, except that this provision shall not apply to lawful holdings of the effective date of the Banking Act of 1885. Requires the Secretary of the Treasury when ever in the judgment of the directors of the Fed era Deposit Insurance Corporation additional funds are required for insurance purposes, to purchase obligations of the corporation in an additional amount not exceeding $250.0OO00O
 I Invrrp l sl.-