Arizona republican., 1913-11-21
All Are Based on Same Gen eral Theory, But Arrive at End Desired by Different Routes - Administration Bill Changed Slightly
FIGHT BEGINS
 ON SATURDAY
Each Proposes Establish ment of Reserve Banks Which Will Issue Cur rency in Exchange for Commercial Paper
ASSOCIATED PRESS DIsPATCHl


 WASHINGTON. Nov. 2O.-Final preparations were made today for the battle over the administration currency reform bill on the floor of the senate on Saturday. Three sep arate currency bills, all based on the same general theory. will be placed before the senate by the divided banking and currency committee. Un- able to agree on amendments. the committee will present the Glass Hay-Owens bill as originally endorsed by the administration and passed by the house. This measure, with it's amendments, it is asspmed. will be acceptable to the president, Chair man owen and five other democratic committee senators, Pomerene, Hollis, Reed, O'Gorman, Shafroth.
 A bill materially changing the structure of the house measure will be presented by the republicans, Senators Nelson, Weeks, BristoW. Me Lean, Crawford and Senator Hitch cock. All three of the proposed bills contemplate the issuance of currency secured by prime commercial paper and held by the banks of the coun- try.
 Each proposes the establishment of reserve banks. which will issue cur rency in exchange for commercial paper to the banks, holding the re- serve behind their deposits mObilized for use in any emergency to redis- count paper held by the banks of the system, thus keeping an aviIable ere dit and currency to ward off a fin ancial crisis. The bills propose to put the entire system under the control of a federal reservoe board to be appointed by the president.
 Although agreeing to the purposes to be accomplished by the proposed legislation. the three plans differ in carry out the purposes. As it passed the house the Glass-Owen bill pro- posed the creation of twelve regional banks. Democrats of the senate com mittee cut them to eight, the mini mum number the president is willing to accept. Republicans reduced the number to four holding that the smaller number could more effective ly concentrate the reserves of the country
 The twelve regional banks proposed by the house bill would be owned by the banks, through compulsory sub scription to stock and banks would elect six of the nine directors of each regional institution This plan was retained by the democrats of the senate committee although it further provided if the banks did not furnish enough capital to run the system, the stock might be sold to the public.
 On this point, Senator Hitchcock and the republicans departed from the administration theory of creating banks of banks" and materially changed the bill. They provided that the reserve banks capital should be subscribed by the public, the banks taking whatever part the public would not take and that the governm ent, through the federal reserve board, should appoint five of the nine di- rectors of each regional bank. It was this proposition which split the senate committee into two camps.
 Each of the bills materially reducz ed the present reserve which national banks must hold against their de- posits. The house bill would fix the reserve at twelve per cent for coun- try banks and eighteen per cent for the banks in present reserve cities. These rates were retained by the ad- ministration forces in the senate com mittee but the republican wing cut down the reserves of the city banks to 15 per cent.
 Tn the house bill paper is made eligible for re-discount and as the basis for currency and commercial paper based on actual merchandising transactions, maturing in not less than 90 days This provision was re- tained by the democrats in the sen ate committee, but the republicans brOadened it materially. Under their bill part of the member banks re- discounts may be made in paper ma turing up to six months. The prOvi- sion gives the advantage to banks with small capital which have little o-called short time paper
 Under the house bill and the draft by the senate committee democrats the regional bank directors would have discretion as to rediscOunting for member banks without limit. In the republican bill each member of the bank is given the right to secure rediscounts up to the full amount of it's capital and under tax, to twice that amount
 Gold reserve to be held by regional banks in their vaults and in their 1 treasury against new circulation is (Continued on Page SeVen)