The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-07-06
OWEN DEFENDS
CURRENCY BILL
Committee Chairman Emphatic
in Advocacy Of Govern
ment Control.
OBJECTIONS ARE ILL-FOUNDED
He Explains Reasons for Op-
posing Board Dominated
by Bankers.
OBJECTIONS ARE ILL-FOUNDEC

Washington, July 6.-Explaining
many details Of the evolution OF the
proposed currency reform plan now be-
fore Congress. Senator Robert L. Owen.
chairman OF the Banking and Currency
Committee of the Senate defended to-
day the plan against attacks and ex-
planned why, In his opinion. many Of
the objections made will not hold good.
he also made II clear that 1t was he
who had stood out for government con-
troll under the proposed system.
"a few days prior to the Presidents
appearance before Congress to urge tho
passage of the currency bill l went 10
the White House and dictated to a
stcnoSrapher in Secretary Tumulty's
Office my reasons for opposing the pro
posed representation of bankers on the
Federal board OF control" he said
Copies Of the statement were handed
to the President and to the Secretary
of State. After the meeting of the Cab
met that afternoon the present plan,
giving absolute government control Of
the board. was agreed upon. and has
been incorporated into the bill"
First Plans Provtsions.
Tho first plan" explained Senator
owen, provided that tho boards of
directors of the regional banks should
be made up of fifteen men, divided into
three classes. Five members were to
be chosen by the stockholding banks.
five members by the stockholders of
the stockholding banks. four to be
elected by the ten men of the first two
classes and one to be appointed by the
government.
With board made up In this man
ner the original pan also provided
that the regional banks should issue
currency based on the assets of the
banks in sums not to exceed twice the
capital stock of the banks. In word
this group of bankers would be given
absolute authority to initiate or contract
the currency of the country at will,
and without a government check on the
manipulators. The Federal board of
control was to be made up of forty
members selected ny the regional banks
and three members to represent the
government.
Logical Result Obvious.
The logical result of such an ar
rangement is obvious. The first five
men would be named by tho directors
Of the banks that owned the stock of
the regional banks. The next five
men would be appointed practically by
the same voters, since the directors of
banks are generally the heaviest stock
holders. And these ten men, repre-
senting identically the same interests
would choose four of the remaining
five members of the boards in control
u the TeGlOnal banks.
Moreover, these men would control
the selection OF the forty men on the
Federal board against whose opinions
on questions affecting the currency
there could be allied only three voters
who were not controlled by existing
banks, Instead of government. which
represents the people OF the United
States, a group OF men representing
the bankers of the country would have
been given control of institution
vitality important to the welfare and
prosperity Of the entire nation. l rea-
lied this when I studied the plan,
and that is why I have fought for
government control as provided in the
present OwenGlass bill"
There seems to be a difference of
opinion In regard to the character of
the commercial paper. which may be
rcdiscounted by the regional banks and
on which currency will be issued
Exactly what commercial paper comes
under this provision of the new law?
Negotiable paper, the proceeds OF
which are utilized for the transfer
and disposal of articles of commerce.
shipments OF merchandise. wheat. cot
ton manufactures. etc. or obligations
Of similar character.
Notes Under Bilrs Provisions.
Il shall make it clearer. II you are
enga ged in business and ship a con-
draft on him is available for discount
in your own bank and rediscount In
the regional bank. Again, II you have
outstanding accounts due on shipments
to various customers. your note for the
sum of money represented by the goods
you have shipped may be discounted
and rediscounted Notes, secured or un-
secured. which are not based on COM
mercial transactions. do not come I'M
der the provision of the bill"
The notes to which you refer, SEN
ator. and which are made by merchants
TO carry them over collection periods
are. as general rule. Endorsed by some
responsible person and are classed by
the banks as secured paper. Would
one-Tame or unindorsed notes be avail
able for rediscount?" asked the inter-
viewer.
Such notes, usually two-name pa
pers. but sometimes one-name papers,"
Senator owen explained. would cease
to be one-name paper when offered for
rediscount. They would bear the in
dorsement of the bank which discount
cd them. and therefore become secured
paper. The original discounting bank
would become the indorser in the eyes
of the regional banks. just as an ordi-
nary indorser Is regarded to-day by
the existing banks"