The Birmingham age-herald., 1913-11-21
STAGE SET FOR FIGHT
ON CURRENCY REFORM
Three Distinct Bills Will Be
Laid Before Senate by Di-
vided Banking Committee
Saturday

Washington, November 20-Final prepa-
rations were made today for the battle
over the administration currency reform
bill on the floor of the Senate, which
will begin Saturday. Three separate and
distinct currency bills, all based upon
the same general theory. will be laid
before the Senate by the divided banking
and currency committee.
Unable to agree on amendments the
committee will present the Glass-Owen
bill, as originally indorsed by the ad-
ministration and passed by the House.
The measure with amendments assumed
to be acceptable to the President will be
submitted by Chairman Owen and five
other democrats of the committee-Sena
tors Pomerene, Hollis, Reed, O'Gorman
and Shafroth. A bill materially changing
the structure of the House measure will
be presented by the republicans, Senators
Nelson, Weeks, Bristow. Mclean and
Crawford and Senator Hitchcock.
All three of the proposed bills con-
template the issuance of currency Sc
held by the banks of the country Each
proposes the establishment of reserve
banks, which will issue the currency in
exchange for commercial paper to the
banks which will hold the reserves behind
their deposits, mobilized for use in any
emergency and which will rediscount the
paper held by banks in the system, thus
keeping available always ample credit
and currency for use to ward off financial
crisis. Each bill propose TO put the en-
tire system under the control of a federal
reserve board to be appointed by the
President.
Three Plans Differ
Although agreeing as to the purposes
to be accomplished by the proposed legis-
lation. three plans differ in almost every
point as to means provided to carry out
these purposes. AS it passed the House
the Glass-Owen bill proposed the creation
of IL regional banks. The democrats of
the Senate committee cut that down to
eight. the minimum number the President
was willing to accept. The republicans
reduced the number to four, holding that
the smaller number could more effectively
concentrate the reserves of the country
The II regional banks proposed by the
House bill would be owned by the banks,
through compulsory subscription to the
stock. and the banks would elect six of
the nine directors OF each regional in
stitution. This plan was retained by the
democrats of the Senate, although it was
further provided that If the banks did
not furnish enough capital to run the sys-
tenn the stock might be sold to the pub
lie.
On this point Senator Hitchcock and the
republicans departed from the administra-
ton theory of creating bank of banks
and materially changed the bill. They
provided that the reserve banks capital
should be subscribed by the public. the
banks taking whatever part the public
would not take, and that the government
through the federal reserve board should
appoint five of the nine directors of each
regional bank. This was the proposition
which split the Senate committee into two
camps.
/ Present Reserve Reduced
Each Of the bills materially reduces the
present reserve which national banks must
hold against deposits. The House bill
| would fix the reserve at IL per cent for
country banks and Is per cent for banks
| In present reserve cities. These rates
were retained by the administration forces
| lican wing cut down the reserves of the
city banks to 15 per cent
| In the House bill the paper made eligible
for rediscount and basis for currency
| is commercial paper based on. acfual
| merchandising transactions. maturing in
!. not less than 80 days. This provision was
! retained by the democrats in the Senate
-
lCentinaeJ On PaGs -lAae.)