St. Johns review. (Saint Johns, Or.) 1904-current, 1913-11-28
CURRENCY BILL
Continued from first page

power, if it so chooses, to act as
a clearing house.
The power TO order as many
examinations as they see fit, but
not less than four per year.
The power Of removal Of
directors of a certain class Of
Federal Reserve Banks. when,
in their opinion, they do not
represent the various industries
of that district.
The power to use their discre-
tion to admit state banks to the
system.
The power to reject members
once they are admitted to the
system.
The power to control the note
issue with power to grant or
refuse the application of Federal
Reserve Banks for same.
The power to require one Fed
eral Reserve Bank TO rediscount
for another.
The power to define paper
which shall be admissible for re-
discount at a Federal Reserve
Bank.
The power TO suspend for "a
period not to exceed thirty days
and to renew such suspensions
for periods not TO exceed 10 days,
any and every reserve require
ment specified in the act.
You surely can comprehend
the vast. and in some instances un
limited powers this board would
have if the House Bill should
become a law. There is no like
lihood, however. that the Senate
will pass tho bill as il stands.
In fact, the administration is
wiling to accept amendments.
and a great many Changes have
been made from the original
draft of the bill, upon the recon-
mendation of bankers and bus
mess men of the country.
do not think the bankers in
general object 10 Government
control. think this should
be so.
II has been suggested that
provision be incorporated in the
bill providing for the appoint
ment of an Advisory Board, com
posed Of one banker from each
district in which a Federal Re. !
serve Bank would be located. !
Three of which would have the !
right TO sit in the official meet. |
ing of the Federal Reserve Board |
and report their actions To the |
members of the advisory board, |
as in the case of the advisory |
board provided for in the Reichs
Bank of Germany. But even
with this feature il is thought
the powers of the Federal Re.
serve Board should be restricted
and their duties more fully |
defined.
There is quite difference of
opinion as 10 the issuance of
bank notes. The present admin.
istration and majority party in
Congress hold. as | stated before,
that such notes shall be issued
through the Federal Reserve
Banks, and be obligations of the
Government. Such notes would
be secured by commercial paper
To the extent of the par value of
the amount of the notes. thus
received by any Federal Reserve !
Bank. Such notes. when paid
out 10y that bank. would become
a first lien on all of its assets.
You will see that these notes will
be secured
First. BY the credit of the
Government
Second. By a specific deposit
by the Federal Reserve Bank of
commercial paper equal 10 the
amount of the notes received. | /
Third. When paid out for "A
Federal Reserve Bank they be. /
come first lien on all the assets h
of that bank.
II is held that the Government [
should not undertake TO guar q
antee these notes, as under the n
plan they are already amply /
secured, and that il would put an /,
responsibility and
burden upon the Government, |
which might cause embarrass- a
nent in times when the Govern HI
nent would want to use IFS credits n
freely and unhampered, as i'm N
he case of war with "A foreign II
nation. IL is further held that n
he manner i'm which they must N
le gotten into circulation would ii
lave a tendency for imitation, n
or a bank note. once il has |
served It's purpose, should be II
automatically redeemed. M
A bank note is not money, and N
should not be confused with real nj
money, II is AN instrument of N
redlt, but the public knows n
hey are fully secured and there fc
ore generally accepted as money.
They perform the same func- d,
ions as checks, and like checks In
hey should be cancelled when ec
aid. o.,
Our present bank notes are Sc m
ured by u. 5. Bonds. Now and m
hen we find that some one is ne
Xclaiming in frantic fashion how NJ
ne banks of the country are al