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 * P'^n 'or the organization of a rural b 
 
 3 1924 013 741 289 
 
62d Congress "I „_„ . „„ ,-r, 
 
 Sd Session | SENATE { ^oToor 
 
 A PLAN 
 FOR THE ORGANIZATION OF 
 A RURAL BANKING SYSTEM 
 IN THE STATE OF VIRGINIA 
 
 CHARLES HALL DAVIS, A. B., A. M. 
 
 ATTGRNEY-AT-LAW, PETERSBUKG, VA. 
 
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 PRESENTED BY MR. FLETCHER 
 Januaky 14, 1913. — Ordered to be printed 
 
 / ■ 
 
 ( 
 
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 WASHINGTON 
 1S13 
 
PLAN FOE ETJEAL BANKING SYSTEM. 31 
 
 BRANCH BANKS. 
 
 The central rural bank shall have the power to establish snch 
 branches outside of the city of Eichmond, in the State of Virginia, 
 or elsewhere, as may be needed for the proper conduct of its business, 
 subject to the approval of the rural bank department. 
 
 RESERVES. 
 
 The central rural bank shall at all times maintain a reserve of at 
 least 25 per cent of its check deposits, plus a reserve of 15 per cent 
 of its time deposits. Of such reserve, at least 15 per cent of its check 
 deposits, plus 8 per cent of its time deposits, shall be maintained in 
 cash in its own vaults. The balance of such reserve may be repre- 
 sented by balances deposited with reserve agents in reserve cities, or in 
 central reserve cities, approved by the Comptroller of the Currency 
 for national banks, or by deposits with such other institutions as the 
 rural bank department may approve.^ 
 
 The nature, limitations on, and character of, loans that may be 
 accepted by the central rural bank, other than those herein specified, 
 shall be subject to the regulation of the rural bank department. 
 
 GENERAL RULES. 
 
 The limitations on loans to and deposits with local rural banks 
 by the central rural bank; the fixing of liability of directors for 
 excess loans; the limitations of loans to directors, or in which di- 
 rectors are interested ; the providing of penalties for violation of the 
 inhibitions above set out ; the necessary rules and regulations govern- 
 ing the operations of the local rural banks, and of the central rural 
 bank; the creation of the rural bank departinent of the State cor- 
 poration commission with the necessary powers and authorities; 
 the charter rights and privileges of the local rural banks, and of 
 the central rural bank; and all the multitudinous details, necessary 
 for the operation of the proposed system, shall be covered by legis- 
 lative enactment or in other proper method. 
 
 CONCLUSIONS. 
 
 It is respectfully submitted that the foregoing plan offers an easy 
 and practical method for financing and building up our farm lands, 
 and for handling and marketing our farm products. That such a 
 system must be further extended to meet the real estate and other 
 requirements of our urban population is admitted. ' That it must, 
 in certain portions of the State, be varied so as to meet the require- 
 ments of a mining and manufacturing community is also selfrevi- 
 dent. But it is true that the chief industry in Virginia is agri- 
 culture ; and that the greatest banking need of the State is a system 
 of banking to finance our farms and farm products. The pressing 
 banking needs of our cities, and of our manufactiires and mines, 
 have been largely met by existing banking institutions. The finaiic- ' 
 
 1 Various suggestions as to the amount of reserve required to be' laajutalned by the 
 central rural bank have been made. The 25 per cent ot check deposits rfcguired under 
 
 the 
 reserve 
 
 plan as stated is in conformity with the requirements on national l;iah$.4a, central 
 rve cities. ' ■ ' i \ ^ 
 
32 SLAW FOE EUEAl BANIflNG SYSTEMS 
 
 ing of the agriculturist is our greatest and most pressing require 
 ment. Witli this accomplished, the rest can be easily provided ; fo: 
 with her farmers prosperous, Virginia can readily finance, with lie 
 own money, and without outside assistance, her every other ir 
 dustry. . . ; • 
 
 The foregoing- plan,' by the creation of small and locally owne 
 banks for a certain purpose, and by the creation of a powerful cer 
 tral financial institution, and .by the use of the credit of these ir 
 stitutions as a means of selling real estate loans to the outside work 
 liot only. makes our local money available for the improvement an 
 upbuilding of agriculture in-this State, but practically insures th 
 investment of. enormous sums of outside money, for long terms, f 
 low rates of interest, in- the iriiprovement of our farm lands, wit 
 air the resultant benefit. 
 
 i I. respectfully invite your criticism of the suggested plan. Coi 
 scions of many of its imperfections, and realizing that its magnitud 
 and importance justify and demand, the most exacting study and tl: 
 most unsparing criticism, I submit the foregoing, with much difl 
 dence, as the germ of a practical method of accomplishing a muc 
 needed reform. 
 
 Charges Hall- Davis, A. B., A. M. 
 
 Petersbueg, Va., September 10^ 1912. 
 
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Cornell University 
 Library 
 
 The original of tiiis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
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