Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-09-09
HOUSE RECEIVES
MONEY MEASURE
Voluminous Committee Report
Explains Purposes of Ad-
ministrati0n Bill.
REPUBLICANS ATTACK
METHODS OF REFORM
Forced Subscription for Stock in Re-
serve Banks One Feature
Criticised.

The administration currency reform bill
as approved by the democratic caucus
was reported to the House today from the
committee on banking and currency. by
including lengthy technical discussion
OF the theory Of the bill, accompanied the
| measure setting forth the views of the
democrats on the committee. Represent
alive Hayes Of California presented a re-
port from the republicans criticising the
measure and proposing various amend
ments
The majority declared that the bill lis
intended to bring about necessary changes
In the present banking and currency sys-
tenn of the United States and to correct
long-standing evils that have had slow
| and deep-rooted growth. 1t aims at the
rectification of the essential defects of the
present system, although it does not seek
to make all the innovations that might,
from an ideal standpoint, be deemed de-
sirable."
Arguments Reviewed.
Reviewing the arguments against the So
called Aldrich plan outlined by the ma
all central bank plans suggested, the re-
port said:
After looking over the whole ground
and after examining the various sugges-
tons for legislation the committee on
banking and currency is firmly of the
opinion that any effective legislation on
banking must include the following funda-
mental elements. which it considers in
d1spensable in any measure likely to prove
satisfactory to the country:
creation of joint mechanism for the
extension Of credit to banks which pos
sess sound assets. and which desire to
iqu1date them for the purpose of meet
Ing legitimate commercial, agricultural
and industrial demands on the part Of
their clientele.
ultimate retirement Of the present
bond-secured currency, with suitable pro-
vision for the fuif1llment Of government
obligations to bondholders. coupled with
the creation of a satisfactory flexible cur
rency to take its place.
Foreign Banking Facilities.
Provision for better extension Of
American banking facilities In foreign
countries to the end that our trade abroad
may be enlarged and that American busi-
ness men In foreign countries may OBJ
tain the accommodations they require In
the conduct OF their operations.
Beyond these cardinal and simple
propositions the committee has not Deem
ed 1t wise at this time to make any
recommendations. save that In a few
particulars 1t has suggested the amend
ment OF existing provisions in the ma
tional bank act. with a view to strength
ening that measure at points where ex-
perience has shown the necessity of al
teration.''
Crediting the present financial system
ncf ~ for. he
panics OF the past half century, the re-
port set forth that under the proposed
law the federal reserve banks to be Gre
ated under the bill would have available
at least $5dOOOOOOOO Of reserves in cash.
Would Create Reservoir.
This" said the report, would create
| a reservoir Of liquid funds far surpass-
ing anything Of similar kind ever avail
able In this country heretofore. It would
compare bavorably with the resources
possessed by government banking in
stitutions abroad
The committee reviewed the bill Sec
| ton by section, setting forth at great
length the probable operation and re-
suits OF the law.
In their minority report on the bil' the
republicans of the committee pointed out
what they held to be the ,aknesses of
| the measure. They said they found the
democrats Of the committee sc bound
by their caucus action that they could
not consider amendments to the bill,
| which II adopted would have eliminated
| It's unsound and questionable provis-
IONS"
Action Held Unnecessary.
They suggested that the provisions
| compelling national bonks to subscribe
! for the capital stock of the federal re-
| serve banks on pain of forfeiture OF
their charters was of doubtful constitu-
| tionality and wholly unnecessary and
inexpedient" If the plan Of the bill II
a good one. they say, the banks would
gladly participate; If not. should the
banks refuse to enter the system all
business would be disastrously affected
| The republicans declared that the pro.
| vision making the Lew federal reserve
notes obligations of the United States
| practically creates central bank They
urged that the powers of the federal re-
serve board were too great and that
| there is great danger az the bill is
| now drawn. that the banking business
Of the country may be used for partisan
/ political advantage"
| The progressive views on the currency
| quest on were set forth in a report on
/ the Glass bill filed several days ago by
! Representative Lindbergh of Minnesota
| the progressive member Of the com.
/ mittee.
| Chairman Owen Of the Senate com.
mittee has arranged for a RESUMPTION
| of the currency hearings Tuesday, Sep.
/, te-1ber l6. at which the frst of severa
| financial students will be examined by