Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-07-05
Committee Chairman Makes 1t
Clear He Stood Out for
Government Control.
SAYS MANY OBJECTIONS
WILL NOT HOLD GOOD
Explains Reasons for Opposing
Board Of Control Dominated by
Group of Bankers.

Explaining many details of the evolu-
don of the proposed currency reform
Plan now before Congress Senate: Rob
ert L. owen. chairman af the ranking
and currency committee of the Senate
defended today the plan against attacks
and explained why in his opinion many
OF the objections made will not hold
good He also made il clear that it was
ne who had stood out for government
control under the proposed system.
A few days prior to the Presidents
appearance before Congress IL urge the
passage of the currency hill I went 10
the White House and dictated to a
stenographer in Secretary Tumultys Of
fee my reasons for opposing the proposed
representation of bankers on tine fedora
board of control he said Copies OF
the statement Were handed In the Presi-
dent and to the Secretary of State. After
the meeting of the cabinet that afternoon
the present plan. giving absolute govern
ment control OF the board was agreed
upon. and has been incorporated into the
bill
First Plans Provisions.
THE first PLAN" explained Senator
Owen, provided that the boards of
directors of the regional banks should
be made up of fifteen men, divided
into three classes Five members We're
10 be chosen by the stockhoiding banks.
five members by the stockholders of the
stockholdinS banks. four to be elected by
the ten men of the first two classes and
one 10 be appointed by the government.
With a board made up in this man
Eer the original plan also provided that
the regional banks should issue currency
based on the assets oS the banks in sums
~ 70 -rss1 %N.l- ~
the banks In word. this group of
bankers would he given absolute author
ity TO initiate or contract the currency
OF the country at will, and without a
government check on the maniPulators.
The federal board. of control was 10 be
made up Of forty members selected by
the regional banks and three members TO
represent the government.
Logical Result Obvious.
THE logica; result of such an ar
rangement is obvious. The first five
men would be named by the directors
Of the banks that owned the stock of
the regional banks. The next five
men would be appointed practically by
the same voters since the directors of
banks are generally the heaviest stock
holders And these ten. men. represent
ing identically the same interests. would
choose four of the remaining five men,
bers of the boards in control of the
regional banks
Moreover these men would control
the. selection of the forty men the
federal board, against whose opinions
On questions affecting the currency there
could be allied only three voters who
were not controlled by existing banks.
Instead of government which represents
the people of the United States. a group
OF men representing. the bankers OF the
country would have been given control
of an institution vitality important TO the
welfare and prosperity of the entire ma
ton. / realized this when L studied. the
plan. and that is why l have fought for
government control as provided in the
present Owen-Glass bill
There seems to be difference of
opinion in regard TO the character of
the commercial paper which may be
and on which currency will be issued
Exactly what commercial paper comes
under this provision of the new law"
Negotiable paper. the proceeds of
which are utilized for the transfer and
disposal Of articles of commerce. For
example. time drafts covering ship
ments of merchandise, wheat. cotton
manufactures. ETC., or obligations of
similar character
Notes Under Bills Provisions
Il shall make it clearer If you are
engaged in business and ship a con-
signment TO a customer, your time
draft on him is available for discount
in your own bank and rediscount
In the regional bank Again. if you
have outstanding accounts due on ship
ments TO various customers. your note
for the sum of money represented by
the goods you have shipped may be
discounted and rediscounted Notes,
cured or unsecured. which are not
based on commercial transactions. do
not come under the provision of the
bill
The notes to which You refer. sena-
tor and which are T|ade by merchants 10
carry them over collection periods, are.
as a general rule indorsed BY some re-
sponsible person. and are claSsed by the
banks as secured paper Would one-name
or unindorsed notes he available for re-
discount" asked the Interviewer
Such notes, usually two-name paper.
but sometimes one-name paper, Senator
Owen explained, would cease 10 he one
name paper when offered for rediScount-
They would bear the Endorsement of the
bank which discounted them and there
fore become secured paper. The original
discounting bank would become the in
dorser in the eyes OF the regional banks.
Just as an ordinary indorser is regarded
today by the existing banks