The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1913-06-25
CURRENCY REFORM BILL,
PROPOSED ADMINISTRATI
MEASURE Is MADE
PUBLIC.
f"rpoSc OF Bill 1hreefOld-Means
for RediscOunting Commercial Pa
pers-BasiS 70 Elastic Notes and
Provision for Foreign Banking Bus
1ness-Federal Banks I'm Reserve un-
der Government Control.

washington, June 19.--The admin
istration currency bin was made pub
lie tonight bv Representative Glass.
chairman Of the house committee on
banking and currency. 1t will be in
troduced in the senate and house af-
ter President Wilson has delivered i'm
person his address to congress on
Monday.
An outline Of the measure prepared
by Mr.. Glass, describing it as IA basis
Tor Legislative action" states that il
will be gone over in detail for altera-
TONS and sets out that its purpose is
to accomplish three principal objects:
PROVISION of a means for redis-
counting commercial paper Of speci-
fled types.
A basis for elastic notes properlv
safeguarded.
Machinery for doing foreign bank
ing business.
The measures essentials remain as
they nave been outlined from time to
time since the president began a study
Of the subject with house and Senate
leaders, Secretary McAdoo and other
advisers, providing II or more federal
reserve banks which will rediscount
paper, deal i'm government securities,
exchange and conduct government
iiscal operations. National banks and
such state banks and trust compa-
nies as conform to standards would be
STOCKHOLDERS Of the reserve banks.
The government would hold no stock.
The government would control the
federal reserve banks entirely
through a federal reserve board OF
seven members i'm which the banks
would have no representation. The
board would be composed of the sec
retary of the treasury, secretary OF
agriculture, the comptroller of the
currency as members ex-officio: four
other members would be chosen by the
president and confirmed by the senate.
The national bank note circulation
.
proposal is made in the bill for retir-
ing approximately $700,0OO,OOO 2 per
cent bonds upon which that note is
.o" r." rests. An amendment or sep
H-., 'i to refund those bonds into 3
poe cent bonds may be introduced
'.t.I.
=. .sl 70 ha
isting national bank notes, not more
than $500, 100000 i'm what are to be
known as federal reserve treas
ury notes might be issued at the dis
crction of the federal reserve board
solely Tor the purpose of making ad =
Vances to the federal reserve banks,
which would do no business with tho
public. deal only with their member
banks and receive deposits from tho
United States.
While the notes would on their
race purport to be the obligations of
the united States they would be re-
quired to be secured by a gold reserv,
. -" -" p'i tcIt pToNlueU Dy the
federal reserve banks, would be q
first and paramount lien on all the
assets Of these banks and would he
red, enable in gold on demand at the
treasury department in the city of
Washington or any federal reserve
bank
against counting any Of these notes as
a part of bank reserves and the sys-
tenn is guarded against imitation by
lodging power with the federal re-
serve board to exact an interest
charge upon the treasury notes in or
der To secure their prompt redemp-
ton. The notes are not made legal
tender but would be receivable by
the government and every bank of
No change would be made in the
protection of other existing notes.
The federal reserve board would re-
quire one federal reserve bank to re-
. "iScounl the paper OF another ana
would establish Il rate of discount not
necessarily uniform for all reserve
banks but made with a view to ac-
communicating the commerce of the
country and promoting a stable price
level
For recasting the present bank re
serve system, the bill proposes to
transfer the reserves from national
banks in the present reserve and cen
tral reserve cities to federal reserve
banks. carrying the process of trans
fer over 3S months to avoid shock to
market conditions.
Tn" bill proposes, according to MIR
Glass statement, ultimately the eS.
enlistment of Reserve system in