Referendum on the report of the Special Federal Reserve Committee

Bibliographic data

Monograph

Identifikator:: 1827879114

URN:: urn:nbn:de:zbw-retromon-221388

Document type:: Monograph

Title:: Referendum on the report of the Special Federal Reserve Committee

Place of publication:: [Erscheinungsort nicht ermittelbar]

Publisher:: [Verlag nicht ermittelbar]

Year of publication:: 1930

Scope:: 53 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

6 [ncrease from 7% to 10% Proposed Reserves of State Banks Review of Reserve Requirements Reserve Authorities Recommendation hea Extension of Membership Attractiveness of Membership Distribution of Earnings of Reserve Banks COMMITTEE REPORT a country institution is not obliged to maintain as high a reserve for bank deposits as a reserve city bank. In view of the recommendations above, which would have the effect of lowering country bank reserve requirements, it would be only equitable to require country banks to keep a ten percent reserve, instead of the present seven percent, against net deposits due to other banks. A factor which has engendered other inequalities is the differ- ence in the reserve requirements of the various state laws, a number of which do not coincide with the federal statutes. State require- ments generally should be correlated with the reserve provisions of the Federal Reserve Act. As indicated, the changes advocated above are put forward to remove discrepancies and to make the system somewhat more at- tractive to member banks. Their adoption would not confuse the situation pending a review of the whole subject of reserve schedules. Such a review has been proposed from time to time by federal re- serve authorities and we support the suggestion, provided the review is undertaken in the first instance within the system itself. We be- lieve that recommendations should be made by administrative offi- cials of the system because of the complicated nature of the subject and the many ramifications of the effects of changes. The Committee recommends that based on the recommendations of administrative officials of the reserve system there should be a legislative revision of those provisions of the Federal Reserve Act relating to member bank reserves. Approximately one-third of the banks of the country belong to the federal reserve system. This membership includes all the na- tional banks, some seventy-five hundred in number, as compulsory members, and some twelve hundred state banks as voluntary mem- bers. It is sometimes urged that steps should be taken to bring into the membership a larger number of state banks. From the stand- points either of increasing the resources of the reserve banks or of providing greater effectiveness in the distribution of credit to all localities, no additional membership is now urgently required. If, however, measures can be taken, which, without lowering membership standards, will make membership more attractive to present and prospective members, they should be given considera- tion. One such, we believe, is the distribution of reserve bank earn- ings in greater part to member banks. At present each reserve bank, after payment of a six percent dividend to member banks of its district, passes the balance of its Continued on page 38)

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