The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1913-12-23

Washington, Dec. 22.-The new bill
affecting the currency, banking and
finances of the country. which has
now been passed by both branches
dent Wilson for his signature. is one
of the most far-reaching measures re-
lating to finance that has been en-
acted in many years. The magnitude
Of the subject, the diversity Of inter-
ests affected, and the length Of the
debates in both branches Of congress.
has made 1t difficult for the ordinary
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
presenting succinctly and in non.
technical language, an apitome Of
as finally framed, the following sum-
mary Is given of the bill as q whole
and Of its principal details.
Committee OF Three.
Generally speaking, the first steps
to be taken to bring into operation
the nations new financial system will
tee consisting Of the secretary Of the
treasury, secretary Of agriculture and
comptroller of the currency. Banks
have sixty days within which to file
their applications for membership in
the new system; and one years time
IL allowed before, the government; will
compel the dissolution Of any ma.
tional bank that refuses Atps jsin: :
The new law will make little direct
change in the operation Of the pres
ent national banks, except to allow
them to loan a certain amount OF
their funds upon farm mortgages. Its
chief purpose is to add q new piece
Of machinery to the banking system
that will take up the slack during
each year; that will give the banks a
place to quickly convert their assets
into cash in time Of need, and that
will bring out new federal currency
when it is needed, and retire it when
money becomes Cheap"
To Utilize Reserves.
Banks are now required to keep a
certain percentage of their deposits
as reserves" part in cash in their
own vaults and part of which may be
redeposited in the banks of New
York, Chicago. st. Louis and other
designated cities. In times of sudden
loaned up to the full limit Of their
resources, these reserves furnish
little relief. because If they are paid
out to meet demands, the banks are
left In precarious condition.
The basic principle Of the new law
Is to get these reserve funds out
into circulation when necessary. with
out lessening the safety Of any bank:
and to provide place to which local
banks may rush in crisis and get
cash for the prime commercial pa
per" they hold In their vaults.
Reserve Banks.
This is to be accomplished through
chain Of regional reserve banks or
reservoirs of reserves" in which all
banks shall deposit a stated part OF
the money they are required to hold
as reserves. Under the new system,
whenever financial furry comes. the
bank can take commercial paper,
such as notes. drafts and bills of ex-
change. to these reservoirs" and Sc
cure the use Of their own reserves, or
II necessary even the reserve of other
banks. by depositing this security.
Loans I'm Need.
The new regional banks will re-
ceive about one-half of the bank re-
"erves OF the country. They, In turn,
will he permitted to loan back to the
banks all but s5 per cent of these
reserves. SO that in case of emerg-
ency, millions of cash can be brought
out into circulation quickly. The
banks will have to pay for these
loans. however. as individuals have to
pay for loan from any local bank;
and this charge is expected to pre-
vent the too free use Of the reserves
held by the regional banks.
New Currency.
a new form of paper currency is
also provided for, to come out in case
Of emergency, and which is expected
to go back into the hands of the
government when times are normal,
These treasury notes" will be printed
by the government, and issued
through each regional reserve bank,
ana Will bear the guarantee both OF
the regional bank and the govern
ment.
II the d"mand for currency in any
section Of the country exceeds the
supply Of circulating money. a reg.
tonal bank can secure this new money
from the government and put it into
circulation: but gold reserve Of
'orty per cent, and commercial paper
auai to the full value of the note.
each note so issued. This provision
IS expected to he the influence that
VII drive the new money back into
retirement when it is no longer
needed.
Plan Made Plain.
The following analysis presents the
details Of the new ,aw without ad-
herring closely to TIE technical divi-
sion of language of the measure.
At the head Of the system Will
stand a federal reserve board at
Washington, appointed by the presi-
dent. and to consist Of the secretary
Of the treasury and six other MEM
bers. Two of these shall lie expert
bankers, but none shall have banking
affiliations or OWN hank stuck during