The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1913-12-24
CURRENCY LAW
CONDENSED
Concise Summing Up of the Measure
that Has Just Passed Both
Houses of Congress

tHdt has ousl tSSSu Dull
Houses of Congress
Washington, Dec. 24.-The new
bill affecting the currency, banking
and finances of the country which
has just passed both branches of
Congress, is one Of the most far
reaching measures relating to fin
ance that's been enacted in many
years. The magnitude of the SUBJ
ject, the diversity of interests affect
ed and the length. of the debates in
both branches of Congress, has
made it difficult for the ordinary OBJ
server to follow the changes and
grasp the essentials of this highly
technical measure in its important
bearing on money, finance. banking
and the entire range of fiscal sub
jects, public and private, which it
affects.
With a view therefore. Of pre-
senting succinctly ami IN non-tech-
nical language, an epitome Of the
salient features of the measure. the
| following summary is given Of the
bill as a whole and OF its principal
details:
First Steps
| Generally speaking, the first steps
to be taken to bring into operation
the nations new financial system
will be thru an organization commit
tee consisting of the secretaries CT
the Agriculture and OF the Treasury
ana the Comptroller Of the Cur
rency. Banks have sixty days II
which to file application for mem
bership in the new system, ani one
years time is allowed before the
government will compel the dissolu-
ton Of any national bank that re
fuses to join.
The new law will MAKE little di-
!rect change in the operation o. the
present national banks, except 20 al
low them to loan a certain amount
|
Its chief purpose is to add a neH
piece Of machinery to the banking
system that will take up the slack
during the changing business con
ditions Of each year; that will give
the banks a place to quickly diver
their assets into cash in time Of neel
and that will bring out new fedora
currency when it is needed anl re
tire it when money become:
cheap"
Banks are not required to keep {
certain percentage Of their deposit!
as reserves" part in cash in thei1
own vaults and part of which ma.
be releposited in the banks Of New
= York, Chicago, st. Louis AMI othe
', designated cities. In times OF sud
den financial demands when bank
have loaned up to the full limit 0
their resources, these reserves fur
nish little relief, because If they ar
paid out to meet demands the bank
are left in a precarious condition.
/. Laws Basic Principle
:, The basic principle Of the new la7
I is to get these reserve funds out in
to circulation when necessary, with
out 1essening the safety o. an
| bank: ana to provide place t
:, which local banks may rush in
i crisis ana get ready cash for tn
e prime commercial paper" they hol
II il their vaults.
This is TO be accomplished thr
Z chain o. regional reserve banks. c
reservoirs of reserves" in which 4
banks shall deposit a stated part {
; the money they are required 70 hol
a as reserves. Under the new system
e when a financial furry comes. Il
banks can take commercial nape
such as notes. drafts ani bills OF e:
r change, to these reservoirs" and $
k cure the use OF their own reserve
or if necessary even the reserves I