The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1913-12-22
THE CURRENCY LAW.

SSNhGNSr LAW.
The Glass-Owen currency bill
passed tho Senate on Friday. and
Will probably become a law within
! the next few days. The bill is modelled
almost entirely after the Aldrich bill.
number OF substantial changes.
however. being made. The Aldrich
, bill provided for a Central bank. with
regional branches. The GlassIOwen
bill provides for regional reserve
banks. all of equal standing and of
like character. The Aldrich bill pro-
vided for the Issuance OF emergency
currency by the regional banks. based
upon the commercial paper held by
the subscribing banks. This is the
essential feature OF both bills. and in
this particular the Glass-Owen bill is
practically a copy OF the Aldrich bill.
The controversies that have been
waged over the number OF regional
banks. the powers OF the federal re-
serve board and the character of the
commercial paper TO be accepted as
security. have been over details, i'm
portant in their character. but not
necessarily essential 10 the whole
plan. A very serious defect in the
Glass-Owen bill appears 10 the Intel
hgencer to be the clause forbiddng
the use of commercial paper OF long
er than the ninety DAYS maturity. as
security for emergency circulation.
In the country districts much OF the
commercial paper held by banks is
OF longer than ninety days maturity
None OF this paper will be available
as security for new currency issues
The relief. therefore. to be afforded
In the country districts will be more
limited and to that extent the bill
may fail Of its purpose
Other defects might be pointed out
in the possibilities OF political control
Of the Federal Reserve Board. and in
the number OF regional banks How
ever. no bill OF this kind could be
framed TO which objections might not
be made. and only thorough test will
determine how far these objections
may indicate defects. and how far
they are groundless.
The currency bill is primarily de-
signed 70 prevent a money panic. II
aims 10 provide the means OF issuing
n large amount OF emergency curren-
cy whenever the needs OF business
may require II. II createsa system OF
banks OF which state and national
banks are the stockholders. and these
regional banks issue the emergency
currency on the security OF the com
mercial paper held by the subscrib-
ing banks. Reduced TO its essence.
II IL simply a national legalization OF
tho clearing house certificate plan.
which was used 80 effectively by the
banks OF Pittsburgh and other cities
during the panic OF 1907 The very
fact that such law Is on our statute
books will in itself do much TO check
panics. In addition 10 this We have
in the Postal Savings Banks. another
great steadying influence which will
tend TO prevent the boarding % mon.
ey during times Of financial stress
We may from time TO time continue
20 have financial stringencies and
conditions approaching panics. but r.
IL impossible not % believe that the
currency bill will IN the end largely
improve financial conditions.
We must not. however. expect from
tho currency bill an assurance % GOOD
times or prosperous business 70 10
purely IN emergency measure ~ will
he appealed 20 only In times ~ stress.
md under normal conditions. n op-
erative az an its effects viii scarcely
he felt