The sun. [volume] (New York [N.Y.]) 1833-1916, 1913-06-20
AN OFFICIAL DIGEST
OF CURRENCY BILL
Salient Points Are Brought to
the Surface for the
Busy Man.

WAsHlSGToN, June Is fefe ~ An
official diges; of the Administration $
currency bill. prepared to give the busy
business man a definite idea Of the pur-
poses of the measure:
The purpose Of the hill - to furnish a
comprehensive revision of the currency
system OF the country So AS 10 obtain -four
principal objects:
!. Provision Of a means for rcdiscount-
ing commercial paper OF specified types.
. Provision OF a basis for elastic note
issues properly safeguarded.
3 Provision OF machinery FOR doinc
foreign banking business
In order to accomplish these purposes
fuliy Il is necessary to repeal certain por-
tions ~ existing law TO rec,ify various
conditions in the present national hank
INK system which are in some cases only
indirectly connected with the objects
sought, to furnish new class 81 insti'u-
tions for the performance of som" func-
tions which cannot well he intrusted /"
existing banks. or AZ all events can better
he performed by others. and to alter the
present reserve system to a very material
degree
The scope ~ the bill can hest he under
stood by an sual!tica! review Of It's con-
tents.
The present banking situation In the
United States rests upon the national bank
act proper as slightly modified from time
70 time and upon the so-caled Aldrch
Nreeland ACT 'act OF March 30. l90s)
OF these acts the latter Is completely
superseded on the ground that II has
never become operative. probably will no
become operative except under eNtren.
stress and was never satisfactory.
The national bank act itself is mod hed
in numerous essential particulars In =
separate measure a general revision OF
tt,,t, ,isfr ftN.. sfS., Of h..
tional bank act will be provided
>ew Class of Banks.
Fundamental ~ the idea OF the bill IS
the creation OF a new class OF banks e.
he known as Federal reserve banks tn.
chief points about which are as follows
!. The number II to be twelve. with
possible increase later as provided
, The ownership Is to bc in the hands
Of the stockholding banks of the twelv,
districts in which the reserve banks ar.
situated The national banks are com
PEELED to be members and State banks
and trust companies are permitted to b,
members
. The capitalization is to he 90 per
cent ~ the capital of the stockholdlus
banks, one half paid In and one half sub.
ject to call
The business OF these Federal re
serve banks is to be as follows
'aI Redscountug Of paper presented
bv stockholdng banks under specified
! conditions provided such paper grows ou,
OF actual agricultural, commercial or in
dustria, transactions and does not run
more than u specified number of DAYS
,b) Buying and selling Government Sc.
, curities gold and silver bullion. and
foreign coin foreign exchange. and open
market bills Of given maturity
,cI Government fiscal operations
tinue its note issue exactly AS at pres
ent and in addition Federal reserve
Treasury notes are authorized to he is
sued to an amount not exceeding $500
600. 600. These notes will upon applca :
tion be issued to the Federal reserve
. banks upon short time commercial paper
and other liquid collateral While the
| notes will on their face purport to be
| the obligations of the United States they
are required TO he secured hy gold re-
serve OF 3S Is per cent, provided by the
Federal reBerve bank and are first and
paramount lien on all the assets OF these
| banks. and are redeemable in gold on de =
| mand at the Treasury Department in the
city OF Washington or at any Fedora
reserve bank Stringent provisions are
made against counting any of these notes
as part OF bank reserves and the sys-
tenn In guarded against imitation by lodg
ing power with the Federal Reserve Board
| 10 exact an interest charge upon Treasury
notes In order to insure their prompt re-
! demptiOn. The notes are not made legal
, tender but are receivable hy the Coy
| ernment and every hank Of the system Rt
! par without exchange No change In
made in the elements OF protection af-
forded existing bank notes
Government Control.
Overseeing the whole system is created
' l.x.a.