In "central reserve cities," that is New York, Chicago and St. Louis, 3% of "time deposits" and 13% of "demand deposits "; in "reserve cities," that is in over 50 other prominent cities listed under that subject, 13% and 10% respectively; and in "country banks," meaning all other "member banks located in cities other than those already mentioned, 3% and 7% respectively. In addition to the foregoing, "Federal Reserve Banks" are required to maintain a "reserve" in gold or "lawful money' of 35% against deposits, and 40% in gold against notes in actual circulation, less gold or gold certificates deposited with the Fed. Res. Agt. as collateral for Fed. Res. notes. The "Reserve" of the Bank of England is explained under the last part of "Bank of England Statement." The difficulty of making clear this term as used among those in the business of life insurance is demonstrated by the following extract from a letter from a well-known life insurance official: "It is not as easy as one might think to give a definition of the word 'reserve,' as used in the life offices, that will be immediately recognized by the layman. Even actuaries, when they come to an analysis, dispute on the definition." The writer has obtained no less than seven distinct and varying definitions for this term, two of which are given below: "A sinking fund computed each year to be held in possession by the life insurance company in well invested assets at a given rate of interest to make good, with expected premiums, each contract at maturity." The reserve is the excess amount charged in the early years of 'level premium policies' to offset the failure to increase the premium during the later years. This reserve is invested by the company, and the proceeds from it make up the deficiencies in the later premium payments."1 Reserve Agent. A bank located in either a "central reserve city" or a "reserve city," which, with the approval of the Comptroller of the Currency, may be selected as a depository in which banks in other cities may keep a portion of their "reserve.’ 66 Banks in central reserve cities may act as reserve agents" for banks located in either reserve" or undesignated cities"; banks located in reserve cities only for undesignated cities." (Refer to the subjects in those in " quotations.) 66 Reserve Bank. Same as "Federal Reserve Bank." Reserve Banks. Banks and trust companies belonging to the Federal Reserve System" located in reserve cities and central reserve cities"; also " Federal Reserve Banks" (see those subjects). 1 World's Work, April, 1906. Reserve Cities. Certain large cities in the United States, other than "central reserve cities," in which all member banks" in the "Federal Reserve System" are obliged to maintain a certain percentage of " reserve upon their deposits. Such banks may act as "reserve agents" for "country banks," so-called. (Refer to the subjects in quotations.) "Reserve cities" are designed to furnish large centers in which country banks may deposit part of their funds for the convenience of being able to draw checks on a large money center. On Jan. 1, 1917, the "Reserve Cities" were as follows: Milwaukee Nashville Philadelphia Pittsburg Portland, Ore. Salt Lake City Sioux City Topeka Waco Washington Wichita Reserve Excess. Meaning the same as "Surplus Reserve." Reserve Fund. The English equivalent of our "surplus." Reserve Held. As used in the "bank statement this indicates the amount of "reserve" (see that subject) as actually held by the banks, without regard to the legal requirements. Resources. Property of all kinds; everything owned; cash on hand, notes and bills receivable, merchandise; in fact everything that one possesses, including what is due him. Respondentia. A loan on the cargo of a vessel, payment being contingent on the safe arrival of the cargo at the port of destination · the effect of such condition being to except the contract from the common usury laws. Respondentia Bond. When a contract is given securing a vessel to the lender as a pledge for the payment of the loan, it is termed a "Bottomry Bond," but when both the ship and the cargo are pledged, it is a "Respondentia Bond." Rest. Surplus or undivided profits; the accumulated and undivided profits of the "Bank of England" are its "rest." With us "surplus" is the term commonly used. Restrictive Indorsement. Sometimes the indorser of an instrument may wish to prevent its further negotiability, and attaches some words to his indorsement to that effect. This is a "restrictive indorsement." Examples, "For collection " or "for account of," or "pay to James Frazer only." Resumption of Specie Payment. First, read "Suspension of Specie Payment." On Jan. 14, 1875, what was known as the Resumption Act was approved, by which the Secretary of the Treasury was directed to make provision for the redemption of United States notes, or "greenbacks," in coin, beginning with Jan. 1st, 1879, and further authorized him to use surplus revenues, as well as to sell bonds at not less than par in coin, for that purpose. Retreating Market. Prices declining. Return. We speak in this country of the "Bank Statement." Abroad, "return is used as the equivalent to our "statement." For example, For example, "Return of the Bank of England." Revenue Bonds. A temporary debt created for the purpose of raising funds for current expenses, and in anticipation of the collection of taxes. Such a debt, however, is usually in the form of notes. Rich Man's Panic. The meaning of the word "panic" being understood, which will be found explained under that subject, it will be an easy matter to comprehend that "rich men's panics" are sudden declines in stock market values brought about by the wealthy speculators and operators suddenly trying to convert their holdings into cash, resulting in injury to themselves rather than to the small speculator or trader. Rigged. A term which has about the same meaning as “manipulated." When the stock market has been “rigged" it is understood that events have been made to transpire in accordance with the wishes of those powerful enough to effect such results. A trap is rigged to catch the unwary animal; the market is rigged to catch the unwary speculator or investor. Right Price. First understand "Options." In London it is usual to refer to the ordinary market price for a forward bargain in firm stocks as the "right price" for the period in question. Rights. When a corporation has occasion to bring out a new stock issue, the privilege may be given to the stockholders, as of record at the time, to subscribe for the new stock at a price less than the existing market quotations of the old stock. The number of shares of new stock to which one may subscribe depends upon the number of original shares which he owns. The privilege attached to each original share is one 'right"; it is used in the plural when two or more original shares are held. Such a privilege generally has a value the value largely depending, of course, upon the price at which the original stock is selling in the market and if the stockholder does not wish to avail himself of it, he can usually sell the "right" to subscribe in his stead to some other party. Rights are dealt in much the same as other securities. They may apply to other securities than shares of stock. (See " Arbitrage.") When a stockholder receives " rights" he should not consider them as dividends, even although they have a value, for it is usual for the old shares to decline in the market about the equivalent of the value of the "rights." A peculiar situation exists in Massachusetts where the Tax Commissioner is obliged by law to treat the proceeds of the sale of rights as income, and the Probate Courts treat it as part of the principal. In order to determine the value of a "right," the following rule is applied: "From the market price of the old stock subtract the subscription price of the new; divide this remainder by a number one greater than the number of old shares required to secure one new share.” Ring. As used in reference to speculation, it is practically the same as "clique." Rio Tinto. Rio Tinto Co., Ltd. A copper mine located in Spain; largely an English and French owned corporation. The stock is extensively handled in London. Rios. Used in London to designate the "ordinary shares" of the Rio Tinto Co., Ltd. Rolling Stock. Locomotives, cars, hand cars, snow plows; in fact all such equipment of a steam, electric, or other rail way. Room Shorts. (See 66 (See Selling Short.") Members of the stock exchange and who do the actual trading thereon; that is," board men," who have been "selling short." Room Traders. See "Traders." Round Transaction (or Trade). A complete transaction; i. e. buying what has been sold, to make good one's contracts, or selling what has been bought. A purchase of 100 shares of Union Pacific followed by its sale is a "round transaction." Round Turn. Explained under "Cotton." Royal Blue Line. The Baltimore and Ohio R. R. Co. Royal Exchange. Where transactions in foreign exchange occur in London. Rs. The sign for the "rupees" of India, as $ is for our dollar. (See also "Rupee.") Rubber. United States Rubber Co. Rubber Goods. Rubber Goods Manufacturing Co. Ruble. The unit of money in Russia, and equal to 51 cents in United States money. Run.1 "Run on a bank." A prevailing belief that a bank is insolvent, or in a condition likely to make it difficult for the depositors to secure their money on demand, often causes a sudden panicky rush among the bank's depositors for the purpose of withdrawing what is due them. This is referred to as a run" and sometimes brings financial disaster to the bank, or at other times a prompt payment of all claims may restore confidence, stopping the run.' Runner. A bank's "runner" is its messenger. (See "Tout.") Runner's Exchange. To comprehend this, an understanding of the matter under " Clearing-House" is first necessary. The "runner's exchange' is an adjunct of the Philadelphia Clearing-House. It is a secondary exchange, as it were, which 1 James William Gilbart, writing in 1834, said: "In the year 1667 occurred the first 'run' of which we have any account in the history of banking. The business of the new-fashioned bankers had increased so fast, and they had become so numerous, that their trade was supposed to be at its height in this year; when, during the time that a treaty of peace was under consideration, the Dutch fleet sailed up the Thames, blew up the fort of Sheerness, set fire to Chatham, and burned four ships of the line. This disaster occasioned great alarm in London, particularly among those who had money in their banker's hands, as it was imagined that the king would not be able to repay the bankers the money they had lent him. To quiet the fears of the people, the king issued a proclamation, declaring that the payments to the bankers should be made at the Exchequer the same as usual." |