The Birmingham age-herald., 1913-12-18

limitation against long-term paper nae
been settled upon solely to assure the
federal reserve banks having paper
that would be liquid" and quickly con-
sertible into cash in time of stress.
Following the numerous attacks on
the note issue provision and the re-
serve requirements of the bill by those
who contended the measure would open
the doors to initiation, the democratic
conference tonight revised the reserve
section. The required, gold reserve be-
hind the new circulation notes was in
creased from 80 per cent, as provided
in the Owen bill, to 40 per cent with a
tax of 1 per cent on depletion of the
reserve down to 321a per cent. An at
tempt to fix an arbitrary limit on
the amount of notes to be issued failed.
Other Amendments Adopted
Other amendments adopted provided
for the use of a part of the surplus
earnings of the original banks for
building up the gold reserve, for an in
crease in the compensation of the men,
bers of the federal reserve board from
$4,000 to $4,000. as provided in the
Hitchcock amendment and that all the
member banks must receive the pro-
posed new notes at par was approved
The conference also decided to re-
model section of the bill providing
for the entrance of state banks and
trust INTO the new SYSTEM,
and voted in favor of a provision
whereby regional banks would be re-
quired to keep fund intact in the
treasury to provide for redemption of
outstanding notes. All these changes,
with several other minor amendments
We're referred to the demicrats of the
banking committee to be framed in de-
tail. The conference took no action on
the guarantee of deposits provision of
the bill.
The conference considered. but did
not act finally upon a point involved
in one of the Hitchcock amendments
defeated on the floor of the Senate to-
day This would allow regional banks
to rediscount for member banks a
specified percentage of six months COM
mercial paper to accommodate banks
in the country districts of the middle
west Under the owen bill only paper
maturing within 80 days would be ell
gible for rediscount
The conference adjourned when the
Senate met at s o'clock but will re-
sumo consideration of amendments to-
morrow evening.
Supports Amendment
At tonight's session Senator Borah OF
Idaho, made lengthy argument in sup
port of an amendment which he had pro-
posed to the administration bill, provid-
ing lnat the notes issued by the Ieuefdi
reserve banks be made legal tender.
"If you put the credit of the govern
ment of the United States behind this
currency" he said, why should that
credit not be extended to the man who
wants to pay his debts as well as to the
| man who wants to gather in the great
wealth of the country through specula-
tion?"
By a vote of 3s to 81 the Senate re-
| jected an amendment proposed by Sena-
tor Hitchcock providing that regional
banks must extend to member banks, as
| a matter of right, rediscounts up to the
amount of the member banks capital
stock, at the prevailing discount rate and
up to twice the capital at increased
rates.
Senator Norris voted with the demo-
Gratis against the amendment. Under the
Owen bill, the granting of rediscounts to
member banks would be entirely in the
discretion of the management of the re-
| gional banks.
Senator Hitchcock then proposed an
amendment to increase to 45 per cent
| the gold reserve against issues of the new
| federal reserve notes.