The Washington herald., 1913-06-21
The New Banking Bill.

The New Banking Bill.
Bankers are inclined 10 look with favor
on the proposed currency legislation, but
are slow to express positive opinion,
until such time as the full text OF the
bill is in hand and has been given con-
sideration. Wall Streets general idea
is that it is a good bill, and could be
easily made better by a few changes.
But there is no hesitation in the un-
qualified approval OF the action OF
President Wilson in forcing the issue
to a successful conclusion at this time.
Business has suffered time and again
because OF the inadequacy of our some
what antiquated currency system to
meet the needs OF an expanding and
steadily growing business.
We have been on the borders of
trouble during great part OF the
current wear. Disastrous sacrifices have
been made to the force of circum-
stance. 10 trouble in foreign lands,
10 the adjustment OF big business to
the Sherman law. in the lessened earn
inos OF railroads and the dread that al
WAYS attends upon tariff revision. and
the transfer OF the administration from
one political party TO another.
While We are recovering, while the
threat Of trouble has been eliminated
for the present. the further annual ad-
ius.ment 10 the moving OF nine bill
lions harvest might be serious but for
the fact that this currency measure
will pave the way, if passed. TO make
the crop movement easier than ever
before.
b. means oi the proposed measure
il will be possible to rediscount, tenn
porarily. high-grade commercial paper.
and occasionally. on paper secured by
collateral. commercial paper to be
known as short time" thirty to sixty
days from date TO maturity, paper
which, in times of stress. is an asset
only in name. may actually be taken to
one of the Federal reserve banks and
rediscoun:ed by banks holding stock
memberships in the reserve banks.
These reserve banks. OF which there
will be twelve, will, in turn. he able
to obtain from the government $780,
100000 emergency money, and these
will be supervised by a Federal board
Of seven members appointed by the
President. three OF whom shall be the
Secretaries Of the Treasury and Agri-
culture and the Comptroller of the
Currency.
Wisely three bankers. and three rep
resentatives OF commercial. industrial,
and agricultural interests will make up
the board OF directors. with three di-
rectors to be named by the Federal
board OF control will comprise the di-
rectorates OF the reserve banks.
New York will not suffer severely.
1t will require an immense capital for
the reserve bank of New York City,
and national banks. which remain as
they are. will always carry part of their
funds in New York 1t may restrict
speculation
The proposed currency measure
makes no provision for retiring the
S7oo.oooooo per cent bonds back of
the national bank circulation of today,
a hard nut TO crack and one that must
be solved some day. Until it is, our
bond-seCured currency. the circulating
medium created by the sale and sub
stitution OF these bonds for currency
Of face value, a maneuver necessitated
after the war, will remain intact. Only
the circulating privilege keeps these
bonds at par and the honor of the ma
ton is back OF them.
Much depends on the character of
the men selected by the Executive for
the Federal board of control and in
turn OF the men selected by the board |
of control TO fill the thirty-six places
on the directories OF the twelve re-
serve banks.
Politics should not be permitted to
dominate the choice OF these positions
the very best men in the country are
none too good.
Some bankers profess to see but one
danger in the proposed scheme-it
might make times too good, might be
responsible for overexpansion, and the
inevitable repression that comes after
all overspeed in business. However,
with good men in the important posi-
ton, men of experience III conserva-
tisn, the sin of overexpansion and the
consequences might be avoided.