Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-04-22
MAY RETIRE CASH
NOW CIRCULATING
Currency Committee Suggests
This as One of Possible
Means of Reform.
PAPER OF QUALIFIED
CLASS TO TAKE ITS PLACE
Joint Meeting to Be Called to
Prepare Program for Spe-
ciaI Session.

WASHINGTON, April 22.-Chair-
man Owen. of the Senate banking and
currency committee, called its mem
bers together today and advised them
of results of informal conferences
with President Wilson Secretary Me-
Adoo and Chairman Glass, of the
House banking committee, on the
Subject of currency reform.
Hearings are to be arranged to be
followed by joint sessions of the cur
rency committees of both House and
Senate, preparatory to currency legis-
lation at the extra session of Con-
gress, provided that the tariff is dis
posed of without unforeseen delay.
Working informally, obtaining the
views of the President and his ad
visers. Senator Owen and Representa-
tive Glass have been looked upon as
the men who will frame a measure
to be known as the Owen-Gl bill,
to be presented at the same time in
both houses, and carrying with it ad-
ministration approval. While there
has been no final agreement as yet
as to the main features of currency
reform certain prevalent ideas, some
of which eventually may be found in
the bill. became known today. These
include:
l. Fifteen regional reserve banks
which would act as fiscal agents for
the government, receiving deposits Of
public moneys, acting as banks of
discount for the banks in their re-
spective regions, and receiving a part
of the reserves of the banks of the
country.
Currency will be issued through the
regional reserve banks. Practically
all the capital stock of these institu-
lions as well as any accruing profits
would be the property of the banks
of each region.
2. A governing board to supervise
the regional reserve banks would be
established, to consist of the secretary
of the treasury, the secretary of ag-
riculture and the comptroller of the
currency as ex-of1icio members; four
directors, chosen by the banks of the
country, and two directors appointed
by the President of the United States.
The details Of this feature have not
been worked out, but it is planned
to have seven to nine members, the
tenure of the directors selected by
the banks to be longer than that of
the other director.
3. The elasticity of the currency
you'd be provided. for by conditions
calculated to prevent imitation Any
notes issued would be redeemable in
gold by providing reserve for actual
gold redemption. There has been some
question as to whether these notes
should be advanced to the banks upon
an interest charge high enough to
prevent imitation or be national bank
notes under like conditions. State
banks would be required to increase
their reserves.
4. The extent to which the reserves
could be used has not been deter
mined, but one plan is in favor or
permitting their use under reasena-
BILE tax. With respect to the rate or
discount it has been variously sug-
gested that the governing board might
require the rate to be made progress
sive when there was an increasing
demand for currency, SO as to stiifen
the open market rate and attract gold
somewhat after the system used py
the Bank of England.
go One of the plans suggested,
and which Representative Glass ad-
vocated in a recent speech, was TO
retire the present bond-secured cur
rency not at once but over period
of ten to fifteen years, which might
% no rent
bonds without the circulation privi-
lege. AS the bond-secured currency
would be retired, substitute cur
rency based on commercial paper or
a. qualified class would automatically
take its place.
Those Democratic leaders working
on currency reform declare the con-
templated changes will be neither
radical nor abrupt, but will merely
perfect the present machinery and
facilities of the country's banking
system. The plan that will be final
ly evolved, they also assert. will be
substantially different from the So
called Aldrich plan.
There is talk of establishing branch
banks abroad to obtain for Ameri-
can bankers a share of the foreign
trade and commercial transactions.
With respect to the subject of guar
anteeing bank deposits, however, the
currency advocates are practically
unanimous that this should be kept
separate from any currency bill, and
that if attempted at all, it should be
taken up after the monetary reform
is in actual operation, when bankers
themselves might determine whether
they wished to establish an insur-
ance fund, possibly out of the earn
ings of the regional reserve institu-
| tions.