994 
RURAL NEW-YORKER 
August 6, 1921 
Lower expense for fuel and tractor upkeep 
is an important saving secured by Fordson owners 
who use the No. 40—the John Deere plow built especially for 
the Fordson. Watch this plow at work in the field—then you 
will readily understand how its lighter draft saves many 
dollars for the user every season. 
JOHN DEERE N940 
The PLOW •with the SELF-ADJUSTING HITCH 
Pulls extremely light because 
of the good scouring qualities and 
high-grade construction of its John 
Deere bottoms; its rolling landside; 
its light weight; its rigid frame; its 
snug, smooth-running bearings, and 
its self-adjusting hitch. 
The self-adjusting hitch moves 
automatically up or down to the 
proper line of draft, when depth of 
plowing is varied. Always—with¬ 
out any attention from the tractor 
operator—the hitch is correct. Bot¬ 
toms run true and level at all depths, 
doing good work and pulling light 
all the time. 
The rolling landside, revolving 
on a greased, smooth-running bear¬ 
ing, entirely eliminates sled-like 
If you own a Foxdson, or plan to buy 
one, be sure to see the John Deere No. 40. 
Note its important, built-for-the-Fordson 
features possessed by no other plow. Write 
for a free folder describing it fully. Address 
John Deere, Moline, Illinois, and ask for 
Booklet NF-837. 
friction with both furrow wall and 
furrow bottom. 
Does high-grade work —equip¬ 
ped with John Deere bottoms that 
scour and do the work the way the 
farmer wants it done. There is a 
type for every soil. 
Flexible link clevis insures even 
plowing in uneven ground—keeps 
the up-and-down action of the trac¬ 
tor from affecting the work of the 
plow. 
Great Strength —beams, braces 
and axles are John Deere new-proc¬ 
ess steel—steel that is unusually 
hard, tough, strong and durable. 
Beams are guaranteed not to bend 
or break. Frame connections are 
hot-riveted—no “give” anywhere. 
JOHN^DEERE 
THE TRADE MARK OF QUALITY MADE FAMOUS BY GOOD IMPLEMENTS 
REICHARD’S 
Animal Bone Base Fertilizers 
and Hydrated Lime 
At Pre-War Prices 
FOE FURTHER PARTICULARS. ADDRESS 
ROBERT A. REICHARD - - Allentown, Penna 
WrvAfl A cl-»£»c Ynlouclied, packed ill bags, *18 
W OOC1 Ac)Il“o per ton F. O. B. Swarthmore, Pa. 
W. H. LE1DY - Swarthmore, Pa. 
TENTS 
F O R K ENT 
CATTLE SALES AND FAIRS 
THOS. MARTIN 304 Canal Street NEW YORK 
COVERS .waterproof, 
6x10, $4. Huy Caps, 
Stack ami tractor 
CANVAS 
covers, plain and waterproofed; all sizes. Write for prices. 
Covers guaranteed. Money returned if unsatisfactory. 
Agents wanted. WILLIAM W. STANLEY, 50 Church SI..N. Y. City 
PEACH TREE BORERS 
Kill them with KRYSTAL-GAS 
Now is tlie time. See U. S. Department of Agri¬ 
culture, Bureau of Entomology, Bulletin No. 796. 
Write for Circular. 
HOME PRODUCTS INC. - Rahway, N. J. 
For Sale-162-Acre Farm ^d^Ty 
all for *M.OOO, S2.000 cash. 400-aore farm, $i>,000— 
81,600 cash. Scud for photos. JOHN FRANTZ, Earlvllle, N.Y. 
SPECIA L 
Combination Offer 
5 Gillies’ A-RE-CO. x * 
lbs. COFFEE 
Bean or Ground v 
L 
3 Sample Mixed ( 
lbs. TEA J 
Buy direct from wholesaler and save 10c on every pound 
SENT PARCEL POST PREPAID ON RECEIPT OF YOUR 
CHECK, MONEY ORDER OR CASH 
Satisfaction Guaranteed or Money Back 
GILLIES COFFEE COMPANY, 233-239 Washington St. 
Established 81 Years New York City 
SAVE PACKAGE COSTS 
FIRST CLASS SECOND-HAND 
i’eacli Carriers, Berry Crates, On¬ 
ion Crates, Baskets of all kinds, 
and other Fruit and Vegetable 
Packages, Egg Cases. All these 
containers are in as good as new condition and 
ready for instant use. 
LET US QUOTE YOU—THAT’S ALL 
THE EMPTY PACKAGE SUPPLY CO. 
Dept. R, 301-303 Johnson Avenue, Brooklyn, N.Y. 
A Primer of Economics 
By John J. Dillon 
Part XXXVI 
able in gold or 
of the States 
and the notes 
Our Bank System 
The national banking system of the 
United States dates from 186-3. Previous 
to that time, with the exception of two 
United States banks, chartered by Con¬ 
gress for 20 years each, the banking busi¬ 
ness of the country was conducted by 
banks organized under the laws of the 
different States. 
Before the American Revolution, the 
Colonies issued paper money or “bills of 
credit,” first to meet expenses of fighting 
the Indians, and finally to escape taxation 
by using this paper money to pay ordi¬ 
nary expenses. This resulted in large 
issues of credit money, and as little or 
no provision was made for its redemp¬ 
tion, it became depreciated. Often it was 
finally repudiated or only redeemed in 
part, and this experience was followed 
by new issues of the same character. 
During the Revolution, the Continen¬ 
tal Congress had no authority to levy 
taxes, and its only recourse was to issue 
paper or credit money. This came to 
have practically no purchasing power. It 
was never redeemed in full, but after¬ 
ward the national government took it in 
at 1 per cent, of the face value. Profiting 
by the previous experience with paper 
money, the framers of the Federal Con¬ 
stitution restrained the individual States 
from issuing credit notes, and provided 
that they may use only gold and silver as 
legal tender for the payment of debts. 
Before the passage of the national hank 
act the principal money in circulation 
was the notes of State banks, redeem- 
silver. The laws of some 
safeguarded these issues, 
were promptly redeemed. 
In other States the hanking laws were 
less strict and the methods of the hankers 
were less conservative. The issues of 
these banks depreciated, and some of 
them were repudiated. Others were 
worthless. Even the notes of sound 
State banks were often viewed with sus¬ 
picion by citizens of other States, who 
had no information to enable them to 
distinguish the good from the doubtful 
or had. In 1SGC, after the national bank¬ 
ing system was established, Congress im¬ 
posed a tax of 10 per cent on the notes 
issued 'by State banks. This tax was 
purposely high enough to make the issue 
of notes unprofitable, and the State hanks 
have not since issued notes. 
Previous to the enactment of the gen¬ 
eral banking law in 1863. two attempts 
to establish national banks were made. 
The first United States bank was char¬ 
tered by Congress in 1701 for 20 years, 
hut the charter was not renewed, and it 
went out of business in 1811. The sec¬ 
ond United States bank was chartered 
in 1S16 and its 20-vcar charter was not 
renewed in 1836, and it also went out of 
business. These hanks issued notes, hut 
they were merely large banks, chartered 
by special acts of the national govern¬ 
ment. They operated branches, hut hard¬ 
ly constituted a national banking system. 
The law creating our national hank 
system was enacted in 1863 by Congress 
during the Civil War. One of its pur¬ 
poses, if not the main purpose at the 
time, was to make a market for national 
bonds. To accomplish this purpose, the 
national banks were authorized to issue 
notes against their holdings of national 
bonds, and the prohibitive 10 per cent 
tax imposed on all issues of State banks 
in 1866 gave the national hauks a mon¬ 
opoly of hank note currency. 
No national hank can he organized 
with a capital less than $25,000, and 
this only for places of less than 3,000 
population. The minimum size of the 
bank varies with the population of the 
place where it is to be located, up to 
$250,000 minimum for the largest cities. 
The hank may issue notes up to the 
amount of its holdings of national bonds, 
but not in excess of its capital stock. The 
bonds must be deposited with the na¬ 
tional government as security for the re¬ 
demption of the notes. The bank must 
also keep on deposit at the national treas- 
u-y a fund equal to 5 per cent of its issue 
of notes, and with this fund the govern¬ 
ment redeems the notes on request. These 
notional hank notes are not legal tender, 
but the government accepts them for all 
payments except customs duties. With 
those governmental safeguards the na¬ 
tional bank notes are always at par with 
gold. The note holders are protected by 
the provisions made by the national gov¬ 
ernment to redeem them. The other 
creditors of the banks, the depositors, are 
not completely protected. After the notes 
are redeemed, the assets of the bank are 
used to pay depositors. If the assets are 
sufficient, the depositors are paid in full. 
If not, they lose. After the depositors 
may 
direc- 
come the stockholders or owners of the 
bank. . The law, however, sets up some 
Provisions for the safety of depositors, 
the banks have been required to keep a 
certain percentage of their deposits in re¬ 
serve, in order that they might be in posi¬ 
tion to meet the requirements of depos¬ 
itors. There are also restrictions on long¬ 
time loans, and on the amount that 
be loaned to any cne person, or to 
tors or stockholders of the bank. Before 
the 1 cc.eral Reserve act they were not 
allowed to loan at all on real estate mort¬ 
gages, and only to a limited extent now. 
lhe banks are required to make frequent 
reports, and are subject to visitation and 
inspection by bank examiners without no¬ 
tice. These precautions do not always 
fully protect depositors, hut losses have 
been light. Suggestions have been made 
to guarantee depositors against loss by 
levying a small tax on the profits of 
hanks to provide a fund to pay depositors 
when banks fail and do not pay depositors 
in full. New York, Chicago and St. Louis 
are classed as central reserve cities, and 
country banks might hold 15 per cent of 
their reserves as deposits in the banks of 
these reserve cities. There arc also a 
number of other cities that are classed as 
reserve cities,” and onc-half of their re¬ 
serve might bo held in the three “central 
reserve cities” as deposits in their hanks. 
This swells the deposits of the banks in 
the three central reserve cities, and has 
a tendency to create large deposits in the 
central reserve cities at the expense of 
the country districts. The national hank 
notes made a very inelastic currency, and 
it was thought that it encouraged specu¬ 
lation and bred panics. 
The Federal Reserve system was cre¬ 
ated in 1913 to furnish an elastic circulat¬ 
ing . medium, and if possible to avoid 
panics. Under this system, the terri¬ 
tory of the United States is divided into 
12 districts, with a bank in each called a 
Federal Reserve Bank. These banks are 
located in Boston, New York. Philadel¬ 
phia, Richmond. Atlanta. Dallas, Cleve¬ 
land, Chicago, Minneapolis, St. Louis, 
Kansas City and San Francisco. The 
stock of these banks is held exclusively 
by the national banks of the district in 
which these reserve banks are located. 
The local harks are called “member 
banks.” National banks must become 
members of the reserve banks; State 
banks and trust companies may become 
members by complying with the require¬ 
ments provided by the law. The system 
is under the control of the national gov¬ 
ernment through the Federal Reserve 
Board, composed of five members, ap¬ 
pointed by the President. The Secretary 
of the Treasury and the Controller of the 
Currency are also members. Federal re¬ 
serve banks do no business witli indi¬ 
viduals. Their business is entirely with 
other banks. They are hanks for bankers. 
The member hanks may now carry a por¬ 
tion of their reserve in these federal re¬ 
serve hanks and the reserve banks them¬ 
selves are required to keep 35 per cent 
of their deposits in their own vaults. 
They are.allowed to earn 6 per cent divi¬ 
dend, then to creat a 40 per cent surplus, 
and any excess above this goes to the na¬ 
tional treasury. 
Coming Farmers’ Meetings 
August 2—“Every Farmer and His 
Family” Picnic, Sandusky, O. 
August 2-5—International Baby Chick 
Association, Philadelphia, Pa. 
August 3—New York State Horticul¬ 
tural Society, Summer meeting, Agricul¬ 
tural Experiment Station, Geneva, N. Y. 
August 9-13—American Poultry Asso¬ 
ciation, Seattle, Wash. 
August _ 17—New York State Horticul¬ 
tural Society, Eastern Summer meeting, 
at home of W. S. Teator, Upper Red 
Hook, N. Y. 
August 17—Ohio Horticultural Sum¬ 
mer meeting, Orchard Heights Farm, 
Ashland, O. 
August 16-1S—Society of American 
Florists and Ornamental Horticulturists, 
thirty-seventh annual convention, Wash¬ 
ington, D. C. 
August 16-19—Annual Farmers’ and 
Homemakers’ Week. New Hampshire Col¬ 
lege, Durham, N. Y. 
August 29-September 3 —Ohio State 
Fair, Columbus. 
August 31—Annual Field Day, Con¬ 
necticut Agricultural Experiment Station, 
Mt. Carmel Field, New Haven, Conn. 
September 5-11—Indiana State Fair, 
Indianapolis, Ind. 
September 5-19—West Virginia State 
Fair, Wheeling, W. Va. 
September 11-17—Kentucky State Fair, 
Louisville, Ky. 
September 12-17—New York State 
Fair, Syracuse, N. Y. 
October 8-15—National Dairy Show, 
Ilamline, Minn. 
November 1-5—Vegetable Growers’ As¬ 
sociation of America, Albany, N. Y. 
November 23-25—American Farm Bu¬ 
reau Federation, annual convention, At¬ 
lanta, Ga. 
