Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-06-24
Miseellaneoas 8eading.
CURRENCY PROPOSITION
Provisions of Democratic Bill Now
Public.

was made public last Thursday night
by Representative Glass. chairman OF
the house committee on banking and
currency.
An outline of the measure prepared
by Mr.. Glass, describes 1t as "a basis
for legislative action" states that II
will be gone over in detail for altera-
tons, and sets out that its purpose Is
to accomplish three principal objects:
Provision of n means for re-dis-
counting commercial paper Of speci-
fled types.
A basis for elastic notes properly
safeguarded.
Machinery for doing foreign bank
ing business
The measures essentials remain as
they have been outlined from time to
time since the president began n study
of the subject with house and senate
leaders. Secretary McAdoo and other
advisers, providing twelve or more
Federal reserve banks which will re-
discount paper, deal in government
securities, exchange and conduct gov
ernment fiscal operations. National
lanks and such state hanks and trust
companies that conform to standards
would he stockholders of the reserve
banks. The government would hold
no stock.
Method of Control.
The government would control the
Federal reserve board Of seven men,
bers in which the banks would have
no representation. The board would
be composed of the secretary of the
treasury, secretary Of agriculture, the
comptroller Of the currency, as men,
bers eX-officiO; four other members
would he chosen by the president and
confirmed by the senate.
The national bank note circulation
would remain undisturbed and no
proposal Is made in the bill for retir-
ing approximately $7OO,OOO,0OO two per
cent bonds upon which that note issue
now rests. An amendment or separ-
ate bill to refund those bonds into
three per cent bonds may he intro
duced later.
In addition to the s70O,OO0,O00 ex-
listing national bank notes. not more
than 100000 in what are to be known
as Federal reserve treasury notes
might he issued ut the discretion of
the Federal reserve board solely for
the purpose Of making advances to
the Federal reserve banks which would
do no business with the public. deal
only with their member banks, and
receive deposits only from the United
States. While the notes would on their
face purport to he the obligations of
the United States, they would be re-
quired to be secured by gold reserve
of 33 1-3 per cent, provided by the
Federal reserve bank, would be first
and paramount lien on all the assets
of these banks, and would be redeem
able in gold on demand at the treasury
department in the city of Washington
or any Federal reserve DanR.
Stringent Provisions.
Stringent provisions are made
against counting any of these notes as
n part of bank reserves, and the sys-
tenn Is guarded against initiation by
lodging power with the Federal re-
serve board to exact any interest
charge upon the treasury notes in or
der to secure their prompt redemption.
The notes are not made legal tender,
but would be receivable by the gov
ernment and every bank Of the system
at par without exchange.
No change would he made in the
protection of other existing notes.
The Federal reserve board would re-
quire one Federal reserve bank to re-
discount the paper Of another, and
would establish a rate on discount not
necessarily uniform for all reserve
banks. hut made with n view to ac-
commOdating the commerce of the
country and promoting stable price
level.
Would Transfer Reserves.
For rccasting the present bank re-
serve system. the bill proposes to
transfer the reserves from national
banks in the present reserve and CEN
trail reserve cities to Federal reserve
banks, carrying the process of trans
fer over thirty light months, to avoid
shock to market conditions. The bill
proposes, according to Mr.. Glass
statement, ultimately the establish
ment of reserve system in which
country banks will have Is per cent of
reserve g. @. II per cent of the total
demand liabilities), such Is per cent
to he held five per cent in the banks 8
vaults five per cent with the national
reserve bank. and five per cent either
at home or with the reserve bank,
while reserve and central reserve city
banks have reserves of twenty per
cent of demand liabilities of which
ten per cent will be at home. five per
cent with the reserve bank of the dis
lllcl, ana I'VE per cent elllltT dl HOluc
or with the reserve bank" The state
mcnt says:
Effect of Plan.
THE presumed effect of this plan
will hc to end the placing Of reserves
with central reserve city banks for
use i'm stock market operations, to
keep reserves i'm some measure al
home. and to require spectators to
get the funds they need in their oper-
ations either by directly borrowing
them from persons who hold them and
want to lend the cash for that pur-
pose or else hy borrowing from the
banks in the places where the opcr-
atiOns are to he carried on.
in the belief that the present re-
serve system is antiquated and un-
satisfactory. that the massing of funds
in New York and other financial CEN
tres. of which so much has been said
in recent years. is largely due to the
present reserve requirements of ma
tinnal banks. and that i'm order tC