Gilpin observer., 1913-08-21

pIi.t...dLeS ;iie ~e thrUleu. Tie SOu.
try is divided into twslve districts
or regions, and a central bank is or.
canned in eacn district, of which the
banks OF that district are stockhold-
ers. Ihese big banks are known as
regional reserve banks and they care
Tor that PORTION of The reserves OF
the little banks which used to be
sent to New York. Thus, instead
OF these reserves becoming concen-
trated in Wall street, they are kept
In the various "re.gioIs" where they
are available fer commercial, indus-
trial and agricultural purposes.
A Panic
7reven;er.
The controlling power in the new
system is the federal reserve board,
Which, as | said befora is named by
the president and therefore always
arswerable to the people. This board
has very extensive powers. Perhaps
the most important is what might be
described as the "panic preventer." ("
This Is a very simple but very ef-
Iectlve device. The federal reserve
board will have a. is disposal five
hundred million dollars in currency.
In times of stress when tne regional
reserve banks are unable to take
care OF the situation, the federal re-
serve board will release to the re-
gional reserve banks so much CT this
great reserve as may be needed. The
regional banks put up as security
prime commercial paper to the full
value OF the loan, and in addition one
third the amount OF the loan in law
ful money of the United States.
We never had panic in the his
tory OF This country which could not
have been squelched at it's inception
by the proper distribution of one nun
dred million dollars. Take the hand
made panic of 1907. All the banks
Of the west and south asked at that
time was tina. the New York banks
pay them what they owed them. But
the New York banks were frighten-
ed to death and would not release a
dollar
Under the Wilson-Bryan bill we
could not have a repetition of that
experience. In the first place, the
country banks would not have their
money tied up in New York. and in
addition they could get all the cur
rency they wanted by depositing Sc
curities in Washington with the fed
eral reserve board.
Forbids Cashiers
Certificates.
With the overthrow of the money
combine, the cashiers certificate"
also disappears. You remember the
bits of paper which took the place
of real money during the panic of
1907? You will see them no more.
for under the Wilson-Rryan bill, the
banks must meet their obligations
with coin CT the Republic or close
their doors.
Another feature OF the bill which
will eventually prove one of its most
benafici1l provisions is what is know
as tho '.rediscount section. This
enables The country anks to redis-
count the paper of farmers and stock
ralstrs with lie -egional banks, and
a The opinion uf ex..erts III have a
strong tendency to not only make
money much easier in the rural dis
tricts, but to materially reduce the
rate of interest charged.
When l spoke of the bill passing
through the fiery furnace" of the
Democratic caucus, was not mere
ly indulging in a fanciful figure O;
speech. When the measure was first
presented to the caucus it inst with
earnest opposition. After a prolong
ed and exhaustive debate the wis
dom OF the great statesmen who draf
ed the bill was amply vindicated. A
careful examination of its provisions
| converted its most stubborn oppon
ents into its most enthusiastic sup
pcrters, and sent it out on the flool
Of the house backed by a harmoni
Gus and confident majority.
Gilpin county has had an ore ex