Show FEDERAL RESERVE E BANKS DANKS Continued 00 r. I n Before Defore discussing the method o of oft t t. organization and management of the h b bunks banks created as outlined in the previous previous pre pre- 1 t article it becomes necessary to tate state here one other source of financing financing financing ing not heretofore mentioned In addition ad to the compulsory subscriptions subscriptions from National Banks Danks from vol I subscriptions from private parties artes the act provides that any bank ank incorporated under state Jaw may upon application duly accepted become a member or stockholder of the he Reserve Bank Dank under such rules and regulations as may be I by the Board but the subscription of any such state bank must t be for forthe forthe the he same lame amount of ot stock as a national national na- na ional bank of ot the same class would be e required to take The state bank has ms a right to withdraw from membership membership mem- mem while national banks cannot do o so without forfeiture of their charter harter These banks being financed as out lined ined were to be managed in the fol fol- lowing owing manner The officers to control con con- rol these Institutions I are to be e elected elect elect- ed cd d by vote of the capital stock the same ame as in ordinary corporations with certain officials requiring rE governmental governmental gov- gov approval but in this connection connection con con- there is one pedlar provision and that is the stock not held by member banks shall not be entitled to o voting powers Is this provision a joker in the bill From what has been icen stated above it is clear who the thes s stockholders of these banks could be bend and nd from the provision just quoted it itis its lis is s also clear that stock subscribed for or by private ate Individuals and corporations corpor corpor- other than member banks baw would have no voting oUng power thus leaving caving the control entirely with the member banks It is interesting to observe right at this point that the law aw creating and e establishing these thelle banks anks has done but very Cry little more than ban to form a huge combination of ot oftie the tie banks of the entire United States this Ills phase of the question will be bemore bemore bemore more fully lully developed further along There here are two provisions that are Important Important im- im here the one providing no limitation imitation upon the amount of capital stock tock a member bank may subscribe for or and hold and which has voting power the other limiting the amount of f capital stock an individual or cor- cor corporation corporation oration other than member banks may hold and which stock tock has no voting power Every Federal Reserve Bank shall shaU shalle be e conducted under the supervision and control of a board of nine direct direct- ors That is to sa say say that each one of ot othe he twelve reserve banks located in inthe inthe the he selected cities become separate corporations and are able to be controlled controlled controlled con con- trolled by a board of nine directors These directors are to perform the duties usually appertaining to the office office office of of- fice of directors of ot banking associations associations and all such duties as are prescribed prescribed pre pre- scribed by law Such board of directors direct direct- ors shall be selected as hereinafter specified and shall consist of nine members holding office for three years and divided into three classes I designated as classes A B n and SIC C Class A A shall sanest consist of three I members who shall be chosen by and be representative of the stock holding holding holding hold hold- ing banks class B shall consist of three members also atao but who ho shall be actively engaged In their di district in commerce agriculture or some other industrial pursuit It should be noticed that th the act ct does not provide at this point how the three men from the general industries are to be chosen but a little further along 11 It will be clear that class B directors are chosen by the stockholders holds holdt ing stoc with power anc and that at least six of the nine members Ml of these corporations derive their tenure tenure tenure ten ten- ure of ot office from the same source the final three members to make up the nine directors are ale to be designated ed by the Federal Reserve Board these last three are arc not to be appointed appoint appoint- ed but designated according to the statute To be continued GEORGE B. B HANCOCK Cedar Cit City Utah |