The Laurens advertiser. (Laurens, S.C.) 1885-1973, 1913-12-31
TALKS
ON CURRENCY LAW
Thinks 1t VIII Benefit Country by De-
concentrating Surplus Money From
New York and Distributing II,

burg, having arrived Sunday for a
short visit. Mr.. Johnson talks inter
estingly of the currency bill recently
signed by President Wilson, saying
it is a piece Of constructive legislation
which is bound to rebound in muEh
good to the country at large. kdc
thinks that it will prevent panics, be-
cause 1t takes away from New Yorl,
the concentration or the surplus
money Of the country, which is used
for speculative purposes and distrib-
utes it throughout the United States.
to be used for legitimate commercial
endeavor
Mr.. Johnson said he was present
when the currency bill was signed
and 1T gave him much pleasure, for
he was one Of the few members of
the house who advocated financial leg
islation during the special session of
congress called for a revision of the
tariff.
Two Fundamental Principles.
The congressman says that the
new currency act has many of the
salient features Of the Vreeland-A Aid
rich act, but differs from it in two
fundamental particulars. The Vree-
land-Aldrich measure provided for a
centralization Of the money Of the
country, while the Glass Owens bill
distributes the surplus in from eight
to twelve regional banks dis tributed
throughout the country; also. the
Vreeland-Aldrich act provided that
the banks could issue paper money,
while the Glass-Owens measure de-
wolves this sovereign function on the
government.
The reserve board, which will have
entire supervision of the regional
banks and the operation of the new
law. will be appointed by the pres
idcnt and will be paid salary Of
$4,000 year, each, from the treas
ury of the United States. The ma
tional banks Of the country are al
lowed GO days to come into the ma
tional system, after that date they
will cease to have any reserve privi-
lcgcs. If they do not come in after
II months, they will lose their ma
tonal charters.
Old Law.
Under the old law, the national
banks were required to keep IS per
cent. Of their deposits as reserve
But, later, Wall street interests got
congress to pass a law allowing the
banks to place threc-fifths Of this
amount in the reserve banks. Almost
invariably this money was sent to
New York and placed on deposit at 2
per cent. interest There it was dis
persed on call loans and used for
speculative purposes. New York,
therefore. has $5oo,oO0,0OO of the
surplus cash Of the country
Under the new law, says Congress
man Johnson, regional banks will be
established all over the country
which will handle surplus of the
banks entering into the new system
This money will be loaned back to
the banks in the system to be used
for commercial and not speculative
purposes. In other words, 1t cannot
be utilized for "wild eating" in
stocks, but must be used for the fur
thcrance of legitimate industrial en-
tcrprises.
Banks Must Subscribe.
Regional banks cannot be estab-
lishcd unless the banks in the terri
tory subscribe to ii minimum OF $4,-
100000 worth Of stock. The reserve
board Of the United States names
three Of the directors and the stock
holding banks name the other six
These nine directors will appoint the
officials Of the regional banks. All
the banks becoming members of the
national system by subscribing to a
regional bank will be under the SUI
peryision Of the reserve board, which,
at any time, may send United
States banking examiner to thorough
ly investigate that institution. The
banks becoming members of the ma
tional system will deposit per cent
OF their surplus and capital in the
regional banks. The regional banks
cannot take individual deposits; they
will be the repositories Of the govern
ment and the banks which are mem