Items of Interest

Six amendments to the Federal reserve act are recommended to Congress in the report of the Federal Reserve Board for the first full year of operation of the new banking system. "A year's experience in the operation of the Federal reserve act," says the report, "has confirmed the board in its profound conviction that the act has been one of the most beneficial pieces of legislation ever adopted by Congress. Not only have its fundamental principles been fully vindicated, but in most details the working of the measure has been successful."

The amendments, as recommended in the report, permit national banks to subscribe and hold stock in banks organized for the special purpose of doing a banking business in foreign countries; permit, with the approval of the board, the issue of Federal reserve notes to Federal reserve banks either against the deposit of commercial paper or gold, provided that the gold so deposited shall count as part of the required reserve of the bank; extend the acceptance system to the domestic trade so far as it relates to documentary acceptances secured by shipping documents or warehouse receipts, covering readily marketable commodities or against the pledge of goods actually sold; permit national banks to establish branch offices within the city or county in which they are located; permit advances to member banks against the member banks' secured promissory notes or against the deposit or pledge of United States Government bonds; and authorize a wide discretion in the making of farm loans by national banks so that a Federal reserve bank might make proper loans of this kind within a radius of one hundred miles of its place of business, whether in its district or another district.

Loving Service
March 4, 1916

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