The Leon reporter. (Leon, Iowa) 1887-1930, 1913-12-04
THE LINE OF DIVISION.

THE LINE OF DIVISION.
The currency bill now in congress
has arrived at the parting Of the
ways. 1t is reported that it is about
& to be made a party measure.
When the Glass bill passed the
house it looked as if such consum-
nation might easily be averted. That
measure was debated with but little
partisan rancor and the division up
on it's passage showed "a republicans
and IA prOgreSsiveS voting with the
democrats This was as 1t should be,
since the currency question had not
been a party issue and the necessity
for intelligent revision Of our present
laws has been insistently dwelt upon
by republicans for years.
In the senate banking and curren-
CIV committee, however, the measure
went aground. 1t is not necessary to
a repeat the story of the division OF
that body, the coquetting on the part
Of democrats with the central-bank
scheme of a Wall street banker, the
feints and utilities. 1t is with the
present that we are concerned. The
committee has become two commit
tees and each has prepared bill. 1t
it important to note their points OF
agreement and their points OF differ
ence, both from one another and
from the house bill.
Both ends of the committee unite
upon the following features:
/, A system of regional reserve banks.
y Eederal control by Federal Re-
serve Board, appointed by the presl-
dent.
The fixing of discount rate by the
several regional banks.
The issue by the regional banks
subject to the control of the Federal
Reserve Board, of currency founded
on prime commercial paper, redeem
able in gold by the United States,
and the maintenance of special
gold reserve for redemption.
The refunding of the 2 per cent
bonds now held to secure national
bank circulation, into per cent obli-
cations.
The authorization of loans on farm
lands by national banks.
The reduction of the reserve re-
quirements of the present national
banking law.
The admission of state banks and
trust companies into the new system.
The two bills differ from each 9TH
er and from the original bill in the
following important particulars:
In the number of the regional
banks. The original bill provided for
~; the republican senate draft pro-
yides for 4, with a future maximum
OF s.; the democratic draft provides
for 8. 1t is evident that the republi-
cans in the senate committee have
gone as far toward single central
Bank as they dared.
The amount of stock in the reserve
bank allotted to the member bank.
4 The original bill provided that the
member bank should take stock to
the amount Of 10 per cent OF its own
e capital and should hold itself ready
\ to take a like amount in addition;
both the senate bills make the
amount 6 per cent instead OF 70.
Each provides for sale of stock car
rying no voting power to the public,
if necessary to secure sufficient CAPT
tai.
The management of the regional
banks. This is point of vital i'm
portance. The Glass bill, and the
fU0MOCTdtlC ScudIc oI olC3 NSolS 'AS
Il MANAGEMENT of each regional bank
in nine directors, of whom the mem
Der banks select two-thirds. The
4 senate republican draft contemplates
nine directors, of whom the Federal
Reserve Board shall appoint five.
This would make the Federal Re-
serve Board really only branches OF
central bank, Washington having
g. &c aonfral han K
under another name.
There are other differences which
we reserve for future discussion.
Those concerning reserves are OF
much practical Importance. But
these are the things which most
deeply concern us all.
The issue is squarely drawn be-
tween the two bills presented by the
two sections of the senate committee.
Shall we have four regional banks
with directorates named, as to ma
iority of their members, from Wash
ington, and consti tuting practically a
single central bank; or shall we have
eight regional banks, each with two
Il thirds of its directorate named by
members banks, constituting each a
self-governing institution, except for
that supervisory control necessary to
prevent such private control OF bank
ing power as Messrs. Baker and Rey-
nolds have told us now exists?
This is a question worth dividing
on. 1t really involves the deepest
difference between the republican and
democratic parties. The party is
ready to go to battle upon it if that
course proves cessary.-Republic.
THEORY VERSUS FACTS.