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

| WASHINGTON. June 23.-Repre
sentative Carter Glass, chairman o.
the House Committee on Banking
and Currency has made puclic 6
digest II the Administrations cur,
rency reform bin which he intro,
duced in the House to-day. BY the
terms OF this measure the Fedora
Reserve Board, which will control the
Issuance OF new currency on appn'
cation OF the regional reserve banks
is to be a Government board en-
tirely.
There viii be no retirement Of ex-
listing national bank circulation. mol
OF the existing 2 per cent United
States bonds used for circulation pur-
poses. Every national bank Is al
| lowed to continue its note issue ex-
actly as at 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-Provisiou Of a basis for
elastic hote Issues properly safe
guarded
"Thlrd-Provisio Of machinery for
doing foreign banking business.
Present Law Inadequate"
Tn order to accomplish these pur-
| poses fully II is necessary 70 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 to
| 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 Aldrich- Vrceland act (act OF
May go 1s0s).
"Of these acts the latter Is com
| pletely superseded on the ground that
| It has never become operative. Il
! probably will not become operative
| except under extreme distress, anC
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 bill
| is the creation of a new class o
banks to be known as Federal re
serve banks, the chief points abou
| which are as follows:
The number is to be twelve, wit
possible increase later as provided
| The ownership Is to be in tn
hands of the stockholdinE banks O
the twelve districts in which the re
serve banks are situated. Nationa
banks are compelled to be member
and State banks and trust companie
are permitted to be members.
THE capitalization is to be 20 pc
cent Of the capital OF the stoCkholdinl
banks, One-half paid in and one hal
subject to call
The business Of these Federal re
serve banks is TO be as follows:
Reserve Banks Business.
"Rediscounting of paper presente
by stockholding banks under speci
I
grows out of actual agricultural. com
mercial or industrial transactions an
does not run more than a specific
number OF days.
Buying and selling Government
securities. gold and silver bullion an
foreign coin; foreign exchange an
open market bills of given maturity
Government fiscal operations.
Every national bank is allowed {
continue its note issue exactly as a
present and In addition Federal re
serve treasury notes are authorize
10 be issued to an amount not exceed
/ ing $500. 600 900.
These notes will, upon application
be issued TO the Federal reserv
banks upon prime short time com
mercial paper and other liquid col
lateral.
Gold Reserve Security.
While the notes will. on thei
faces, Purport to be the obligation
OF the United States, they are re
quired to be secured by a gold re
serve Of SO Ia per cent provided b
the Federal reserve banks and are
first and paramount lien on all tn
assets Of these banks. and are re
deemable in gold on demand at tn
Treasury Department in Washlngto
or at any Federal reserve bank.
Stringent provisions are mad
against counting any Of these note
as a part of bank reserves. and tn
system is guarded against imitation
by lodging power with the Fedora
Reserve Board to exact an interes
charge on treasury notes I'm order q
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
tenn at par without exchange.
Overseeing the whole system il
created a Federal reserve board. con
sisting Of seven members. inCludin!
the SECRETARY Of the Treasury. tn,
! Secretary Of Agriculture and Comp