Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-10-21
CURRENCY PLANS
TAKING ON SHAPE
Members of Senate Committee
Already at Work With
Amendments.
NO POLITICS IN BODY
NOW TOILlNG WITH BILL
Senator O'Gorman Resents Charge
That Partisanship Is Shaping
Reform Of Banking.

While the hearings on the currency bill
before the Senate banking committee
may not end before Saturday. amend
ments have the attention OF the men,
bers.
President Wilson's intimation that he
will not object to changes in the per-
sonnet OF the federal reserve board and a
reduction in the number Of regional re-
serve banks, has made 1t practically GER
tain that the desires of many senators
to make those changes will be carried out.
with prospect of administration approval.
Many other important notifications
VIII betaken up when comm ttee work
begins on the measure next week. Among
the proposed changes Ia one that Will
go to the very basis Of the BILL the pro-
vision authorizing the rediscount of COM
mercial paper and the issue OF currency
by the federal reserve banks.
The House provision, some witnesses
have held, was too broad. allowing prac-
designated to be rediscounted. Others.
particularly representatives Of smaller
banks in the middle west have con-
tended that the rediscount provisions
would be useless to them.
Senators Bristow, Hitchcock. Reed
to extend the length Of the maturity
OF certain percentages Of the paper
the reserve banks might rediscount. to
enable country banks holding elk and
nine months paper to enjoy the ad-
amendment along this line, coupled
with more definite designation of
commercial paper" probably will be
written into the bill.
Under the bin as passed by the House
paper without limit for their member
banks, but no provision is made that
gives member banks the right to demand
such discounts. Members of the com
necessary to provide that member bank,
as q matter of right. may apply for and
receive discounts up to a fixed limit.
May Change Compulsory Feature.
The compulsory feature Of the bill. un-
.er which all national banks would be
required to join the system and subscribe
81 per cent of their capital In stock OF
the federal reserve bank of their district
and turn over per cent OF their de-
posts to the reserve bank, also may be
changed In that connection the commit
tee will make more definite provisions re-
ating to state banhs and trust companies,
to insure that both state and national
nearly equal privileges as possible. "A
plan to open the stock Of reserve banks
to public subscription will be consid-
cred.
Another suggested amendment would
limit reserve banks In their clearings &c
ent collection system for personal cnecks
The provision limiting the dividends to
be paid by reserve banks to per cenl
may b eincreased to q, and the provision
that after the accumulation OF ~ pei
cent SURF us. all profits OF the reserve
banks except the dividends shall be dis
tributed 90 per cent to the government
and 10 per cent to the STOCK holding
banks. may be changed to give all the
surplus profits to the government.
The problem of whether the federal re-
serve banks are to be allowed to enter
the open mai ket to buy or sell CONNER
cial paper in competition with other
banks to maintain the discount rate also
will be considered.
Little Partisan Politics.
A declaration that partisan politics is
playing q less part In banking and cur
rency legislation today than at any pre-
vious time in the history of the Uni. ed
States was mace by Senator OGorman
of New York, during the hearing pe.ore
the banking and currency committee OK
the senate. IL WAS CoTIoUoEaSco W Nv"
ator Ne.son, republics
This declaration WAS called forth by
a statement of Victor Morawttz OF
New York, who continued mis- discus
sion of the pending Gu. rency bill to0ay
Mr.. Morawitz said that oanking aa az
currency had never been considered nj
subjects for partisan poiiIics IN any
of the European countries, but tina,
they had always been in politics In
this country TO greater or less ex
tent. Mr.. Morawitz declared that poll
tics and currency should be divorced.
AZ do not see any evidence OF par
tisan politics entering into the consid.
Grafton of currency in this committee,
Mr.. Morawitz admitted when he was
pressed for an answer as to whether
poii les was playing part In the
bankins and currency OF the country
today. But the newspapers say that
politics Is entering into it," he added.
II will say that party politics Is
playing less part in banking and
any other time in the history of the
United States" was Senator door
mans comment.
"Don't you know that to be the case.
Mr.. Morawitz?" asked Senator Nelson
az hope that IL is So" said Mr.. Nor
awitz.
Terms It Central Bank.
During his discussion of the bill Mr.
Morawits vigorously criticised that pro
vision which would compel one regional
rese We bank to rediecount the parer o.
another He dec AIRED that the Giass bill
as II stands Is In really q central bank
1T Is the A,drich central bank p an In
disguise sad Mr.. Morawitz. lit pro
y;des for as great a Capitalization Of
power as any central bank system. II
has all the vices of the central bank sys-
tenn. but none of the virtues
Senator Nelson asked Mr.. Morawitz IL
he were not doing violence to the fun
principles Of the bill. particular
ly that which looks to the mobilization
Of the reserves Mr.. Morawitz declared
that he thought each regional reserve
bank should be sufficiently strong to stand
on its own legs, or else the system would
be of no value. He said that the Secre-
tary of the Treasury should be empowered
to place the government deposits In those
regional banks where they were most
needed In times Of stress, and that GER
tain note issues should be permitted un-
der the direction Of the same official. to
help out.
MT. Morawitz declared. however. that
re zional reserve banks should be given
the broadest powers as to doing business
with one another. rediscounting paper,
etc. He said that 1t was entirely unneces-
sary to compel one REGIONAL bank to redis-
count the paper Of another: that such a
vyo,,ld Y.<u,,ft q, boa NopH;pD nd