Reserve city

1.(Banking) In the national banking system of the United States, any of certain cities in which the national banks are required (U. S. Rev. Stat. sec. 5191) to keep a larger reserve (25 per cent) than the minimum (15 per cent) required of all other banks. The banks in certain of the reserve cities (specifically called central reserve cities) are required to keep their reserve on hand in cash; banks in other reserve cities may keep half of their reserve as deposits in these banks (U. S. Rev. Stat. sec. 5195).
In reserve
in keeping for other or future use; in store; as, he has large quantities of wheat in reserve; he has evidence or arguments in reserve.
Reserve air
(Physiol.) Same as Supplemental air, under Supplemental.
Webster's Revised Unabridged Dictionary, published 1913 by G. & C. Merriam Co.
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National banks in all other cities and towns, known as country banks, were subject to a 15 percent reserve requirement, three-fifths of which could be held as deposits at reserve city or central reserve city banks.
The most important enticement allowed national banks in other large cities to count as part of their reserves any deposits they held at national banks in New York City, which created the familiar three-tiered banking structure of country banks in small cities, reserve city banks in large cities, and central-reserve city banks in New York City.
The National Banks were divided into three subcategories based on size and location: central reserve city banks, city reserve banks, and country banks Central reserve city and city reserve banks faced reserve requirements of 25 percent, while country banks had 15 percent.
The National Banking Acts of 1863 and 1864, for instance, provided regulatory incentives for national banks located outside "reserve cities" to deposit a portion of their reserves in reserve city national banks.
Regional banking panics in the early 1930s drained these interbank deposits from central reserve city banks of Chicago and New York.
First, the Treasury, the Clearing Houses and central reserve city banks centralised the metallic reserves.
This was because these so-called "country banks" relied for a good portion of their liquidity on "reserve city" banks, located in larger cities around the country.
The structure of the National Banking system directed, for the most part, where the reservoir of reserve funds for the banking system would be held because country banks were permitted to hold reserves in the form of deposits at reserve city (or central reserve city) banks.
During periods of low money demand, too many reserves wound up concentrated in just one city because of "pyramiding of reserves." Banks in the interior of the country were allowed by law to hold a fraction of their reserves in banks located in cities designated as "reserve cities." Reserve city banks then could ship their excess funds to banks in cities designated as "central reserve cities." Ultimately, a significant percentage of reserves accumulated in New York City, where in 1907 only six banks held 75 percent of interbank deposits.
From June 1917 to August 1936, the requirement for all member banks on time deposits was 3%, while the requirement for net demand deposits was 7%, 10%, and 13% at country, reserve city, and central reserve city banks respectively.
vault but also deposits in Reserve City and Central

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