Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-23


the House Committee on Banking
and Currency has made puclic a
digest NJ the Administrations cur
rency reform bin which he intro
duced in the House to-day. BY the
terms Of this measure the Federal
Reserve Board, which viii control the
issuance Of new currency on appH-
cation Of the regional reserve banks
ia TO Doe a Government board en-
tirely.
There viii be no retirement Of ex-
listing national bank circulation, nor
Of the existing per cent United
states bonds used for circulation pur-
poses. Every national bank IS al
lowed TO continue its note issue oX-
actly as az present.
Following is the digest prepared by
Representative Glass:
THE purpose Of the bill is TO fur
nish a comparative revision Of the
currency system Of the country so as
TO obtain three principal objects:
First Provision OF a means for
rediscounting commercial paper OF
specified types.
Second Provision Of basis for
elastic hote Issues properly safe
guarded.
Provision OF machinery for
doing foreign banking business.
present Law inadequate"
In order 10 accomplish these pur-
poses fully II is necessary to repeal
certain portions Of existing law, to
rectify various conditions in the pres
ent national banking system which
are In some cases only indirectly con
nected with the objects sought; TO
furnish new class of instructions FOR
the performance Of some functions
which can not wen be intrusted to ex %
listing banks, or at all events, can
better be performed by others. and 10
alter the present reserve system to a
very material degree
The scope Of the bill can best be
understood by an analytical review
Of its contents
The present banking situation OF
the United States rests ON the nation
al bank act proper, as slightly modi-
fed from time to time, and on the So
called Aldrtch- Vreeland act (act OF
May 80, 190S).
"Of these acts the latter Is com
pletely superseded on the ground that
II has never become operative II
probably will not become operative
except under extreme distress and
never was satisfactory. The nation
al bank act itself is modified in nu-
merous essential particulars.
New Class of Banks.
Fundamental to the idea Of the bin
is the creation OF a new class OF
banks to be known as Federal re-
serve banks the chief points about
which are as follows.
The number is to be twelve. WITH
possible Increase later as provided
The ownership is to be in the
hands of the StoCkhOlding banks OF
the twelve districts i'm which the re-
| serve banks are situated. National
banks are compelled to be members
| and state banks and trust companies
are permitted to he members.
The capitalization is to be 20 pei
cent Of the capital Of the stockhulding
banks, one-half paid in and one-halt
| subject TO call.
The business Of these Federal re.
| serve banks is TO be as follows:
Reserve Banks Business.
"Rediscounting of paper presentat
| by stockholding banks under speci-
! fed conditions, provided such paper
/ grows out Of actual agricultural. com.
! merCial or industrial transactions ant
| does not run more than a specified
: number of days
Buying and selling Government
/ securities, gold and silver bullion an
| foreign coin, foreign exchange ant
| open market bills of given maturity
! Government fiscal operations
! Every national bank is allowed t
| continue its note issue exactly as a.
! present and in addition Federal re.
i serve treasury notes are authorized
! to be issued to an amount not exceed.
1 ing $4,000 600
These notes viii. upon application
! be issued 10 the Federal reserve
banks upon prime short time com.
| merCial paper and other liquid col
| lateral
| Gold Reserve Security.
While the notes win on thei,
! faces. purport to be the obligations
Of the United States. they are re.
| quired to be secured by a gold re.
/ serve Of IS Is per cent provided by
! the Federal reserve banks and are
first and paramount lien on all tn,
/ assets OF these banks. and are re,
I deemahle in gold on demand at tn,
, Treasury Department in Washington
or al any Federal reserve bank.
Stringent provisions are made
against counting any Of these note,
as a part Of bank reserves. and tn.
/ system IS guarded against initiation
by lodging power with the Fedora
/ Reserve Board to exact an interest
charge on treasury notes In order &C
insure their prompt redemption.
The notes are not made legal ten,
der but are receivable by the Gov.
eminent and every bank of the syS.
TEN at par without exchange.
Overseeing the whole system Is
created a Federal reserve board. con.
sisting of seven members including
the Secretary of the Treasury. the
| Secretary Of Agriculture ana Comp