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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Sept. 1, 1913)
"T;7r7ffDP?FW ?C' 4 fp " ,. -W " , f r If The Commoner VOL. 13, NO. 29 12 v.1 , t I it ( United States shall 1)0 paid and re turned to tho federal reserve bunks 'through which they woro originally .'issued, and federal resorvo notes re ceived by tho treasury otherwise than for redemption shall bo ox changed for lawful money out of !tho live per centum redemption fund 'horolnaftor provided an(J returned as 'hereinbefore provided to tho resorvo bank through which they woro originally issued. Tho fodoral rosorvo board shall have powor, In its discretion, to re quire federal reserve banks to main tain on deposit in tho treasury of tho "United States a sum in gold equal to flvo per contum of such amount of fodoral rosorvo notes as may bo is sued to them under the provisions of this act; but such five per centum shall be counted and included as part of tho thirty-three and one-third per centum resorvo hereinbefore re quired. The said board shall also have tho right to grant In wholo or in part or to reject entirely tho ap plication of any federal resorvo bank for fodoral resorvo notes; but to the extent and in tho amount that such application may be granted tho federal resorvo board shall, through its local federal reserve agent, de posit foderal reserve notes with tho bank so applying, and such bank shall bo charged with the amount of such notes and shall pay such rate of interest on said amount as may be established by the federal reserve hoard, which rate shall not bo less than one-half of ono per centum per annum, and tho amount of such foderal rosorvo notes so issued to any such bank shall, upon delivery, bocomo a first and paramount lien on all tho assets of such bank. Any federal resorvo bank may at any time reduce its liability for out standing federal reserve notes by tho deposit of federal reserve notes, , whether issued to such bank or to somo other resorvo bank, or lawful I money of tho United States, or gold 1 bullion, with any federal reserve agent or with the treasurer of the United States, and such reduction Bhall bo accompanied by a corres ponding reduction in tho required reserve fund of laiwful money set apart for the redemption of said notes and by the release of a corres ponding amount -of the collateral security deposited with tho local federal reserve agent. Any federal reserve bank may at its discretion withdraw collateral deposited with the local federal re serve agent for the protection of federal reserve notes deposited with it and shall at tho same time substi tute other collateral of equal value approved by the federal reserve agent under regulations to be pre scribed by the federal reserve board. it snaii do tne uuty or everv provisions of section fifty-one hun dred and fifty-nine of the Re vised Statutes of the United States, and section four of the act of June 20, 1874, and section eight of tho act of July 12, 1882, and of any other provisions of existing statutes, as require that before any. national banking association shall bo auth orized to commence banking busi ness it shall transfer and deliver to tho treasurer of the United States a stated amount of United States registered bonds bo, and the same is hereby, ropealod. REFUNDING BONDS Section 19. That upon applica tion the secretary of the treasury shall exchange the two per centum bonds of the United States bearing the circulation privilege deposited by any national banking association with tho treasurer of the United States as security for circulating notes for three per centum bonds of tho United States without the circu lation privilege, payable after twen ty years from date of issue, and ex empt from federal, state, and mu nicipal taxation both as to income and principal. No national bank shall, in any one year, present two per centum bonds for exchange in the manner hereinbefore provided to an amount exceeding five per centum of tho total amount of bonds on de posit with the treasurer by said bank for circulation purposes. Should any national bank fail in any one year to bo exchange its full quota of two per centum bonds under the terms of this act, the secretary of the treasury may permit any other na tional bank or banks to exchange bonds in excess of the five per cen tum -aforesaid in an amount equal to the deficiency caused by the fail ure of any one or more hanks to make exchange in any one year, al lotment to be made to applying banks in proportion to their holdings of bonds. At the expiration of twenty years from the passage of this act every holder of United States two per centum bonds then outstanding shall receive payment at par and accrued interest. After twenty years from the date of the passage of this act national-bank notes still remaining outstanding shall be recalled and redeemed by the national banking associations issuing the same within a period and under regulations to bo prescribed by the federal reserve board, and notes still remaining in circulation at the end of such period shall be secured by an equal amount of law ful money to he deposited in the treasury of the United States by the banking associations originally issu ing such notes. Meanwhile every national bank may continue to apply for and receive circulating notes federal reserve bank to receive on from the comptroller of the currency deposit, at par and without charge for exchange or collection, checks and drafts drawn upon any of its de positors or by any of its depositors upon any other depositor and checks and drafts drawn by any depositor in any other federal reserve bank upon funds to the credit of said de positor in said resorvo bank last men tioned, nothing herein contained to be construed as prohibiting member banks from making reasonable charges to cover actual expenses in curred in collecting and remitting funds for their patrons. The federal reserve board shall make and pro mulgate from time to time regula tions governing the transfer of funds at par among federal reserve banks, and may at its discretion exercise functions of a clearing house for such, federal reserve banks, or may designate a federal reserve bank to exercise Buch functions, and may also require each such bank to exercise the functions of a clearing house for its shareholding banks. Section 18. That so much of the based upon the deposit of two per centum bonds or of any other bonds bearing the circulation privilege; but no national hank shall be per mitted to issue other circulating noteB except such as are secured as in this section provided or to issue or to make use of any substitute for such circulating notes in the form of clearing-house loan certificates, cashier's checks, or other obligation. BANK RESERVES Section 20. That from and after the date when the secretary of the treasury shall have officially an nounced, in such manner as he mav elect, tho fact that a federal reserve bank has been established in any designated district, every banking association "within said district which shall have subscribed for stock in such federal reserve bank shall be required to establish and maintain reserves as follows: (a) If a country bank as defined by existing law. it shall hold and I maintain a reserve equal to twelve per centum of the aggregate amount of its deposits, not including savings deposits hereinafter provided for. Five-twelfths of such reserve shall consist of money which national banks may under existing law count as legal reserve, held actually in the bank's own vaults; and for a period of fourteen months from the date aforesaid at least three-twelfths and thereafter at least five-twelfths of such reserve shall consist of a credit balance with the federal reserve bank of its district. The remainder of the twelve per centum reserve hereinbefore required may, for a period of thirty-six months from and after the date fixed by the secretary of the treasury as hereinbefore pro vided, consist of balances due from national banks in reserve or central reserve cities as now defined by law. .From and after a date thirty-six months subsequent to the date fixed by the secretary of the treasury as hereinbefore provided the said re mainder of the twelve per centum re serve required of each country bank shall consist either in whole or in part of reserve money in the bank's own vaults or of credit balance with the federal reserve bank of its dis trict. (b) If a reserve city bank as de fined by existing law, it shall hold and maintain, for a period of sixty days from the date fixed by the sec retary of the treasury as hereinbe fore provided, a reserve equal to twenty-five per centum of the aggre gate amount of its deposits, not in cluding savings deposits hereinafter provided for, and permanently there after eighteen per centum. At least one-half of such reserve shall consist of money which national banks may under existing law count as legal re serve, held actually in the bank's own vaults. After sixty days from the date aforesaid, and for a period of one year, at least three-eighteenths and permanently thereafter at least five-eighteenths of such re serve shall consist of a credit bal ance with the federal reserve bank of its district. The remainder of the reserve in this paragraph re quired may, for a period of thirty-six months from and after the date fixed hy the secretary, of the treas ury as hereinbefore provided, consist of balances due from national banks in central reserve cities as now de fined hy law. From and after a date thlrty-hix months subsequent to the date fixed by the secretary of the treasury as hereinbefore provided, the said remainder of the eighteen per centum reserve required of each reserve city bank shall consist either in whole or in part of reserve money in the bank's own vaults or of credit balance with the federal reserve bank of its district. (c) If a central reserve city bank as defined by existing law, it shall hold and maintain for a period of sixty days from the date fixed hy the secretary of the treasury as herein before provided a reserve equal to twenty-five per centum of the aggre gate amount of its deposits, not in cluding savings deposits hereinafter provided for, and permanently there after eighteen per centum. At least one-half of such reserve shall con sist of money which national hanks may under existing law count as legal reserve, held actually in the bank's own vaults; and at least one fourth of such reserve shall consist of a credit balance with the federal reserve bank of its dis trict. The remainder of the eigh teen per centum reserve required of each central reserve city bank shall consist either in whole or in part of reserve money actually held in its own vaults or of credit balance with the federal reserve bank of its district. Section 21. That so much of sec tions two and three of the act of June 20, 1874, entitled "An act fix ing the amount of United sium notes, providing for a redi.rribution of the national bank currency and for other purposes," as provides that the funds deposited by any national banking association with the treas, urer of the United States for the re demption of its notes shall bo counted as a part of its lawful re serve as provided in the act afore said, be-, and the sanfe is hereby, re pealed. And from and after the pas sage of this act such fund of live per centum shall in no case be counted by any national banking association as a part of its lawful reserve. Section 22. That every federal reserve bank shall at all times have on hand in its own vaults, in gold or lawful money, a sum equal to not less than thirty-three and one-third per centum of its outstanding de mand liabilities. The federal reserve board may notify any federal reserve bank whose lawful reserve shall be below the amount required to bo kept on hand, to make good such reserve; and if such bank shall fail for thirty days thereafter so to make good its lawful reserve, the federal reserve board may appoint a receiver to wind up the business of said bank. BANK EXAMINATIONS Section 23. That tho examina tion of the affairs of every national banking association authorized by existing law shall take place at least twice in each calendar year and as much oftener as the federal reserve board shall consider necessary in order to furnish a full and complete knowledge of its condition. The sec retary of the treasury may, however, at any time direct the holding of a special examination. The person as signed to the making of such exami nation of the affairs of any national banking association shall have power to call together a quorum of the directors of such association, who shall, under oath, state to such ex aminer the character and circum stances of such of its loans or dis counts as he may designate; and from and after the passage of this act all bank examiners shall receive fixed salaries, the amount whereof shall be determined by the federal reserve board and annually reported to congress. But the expense of the examinations herein provided for shall be assessed by the federal re serve board upon the associations examined in proportion to assets or resources held by such associations upon a date during the year in which such examinations are held to be established by the federal reserve board. The comptroller of the cur rency shall so arrange the duties oi national-bank examiners that no two successive examinations of any as sociation shall be made by the same examiner. In addition to the examinations made and conducted by the comp troller of the currency, every federal reserve bank may, with the approval of the federal reserve board, arru" for special or periodical examination of the member hanks within its an. trict. Such examination shall ue J" conducted as to inform the federal reserve bank under whose auspices it is carried on of the condition o its member banks and of the lines o credit which are being extended oy them. Every federal reserve ban shall at all timeB furnish to w federal reserve board such Informa tion as may be demanded . oy latter concerning the condition any national banking assoc tot on located within tho district of m said federal reserve bank. Tho federal reserve board snan often as it deems best, and m a j case not less frequently than times each, year, order an ain tion of national banking assodao in reserve cities. Such 01int shall show in detail the total am of loans made by each bank on '.'V4 . . vjft .w jqAftftjdoffiyglifr11 sli