The Washington herald., 1913-06-27
PROVIDESFOR.
BOND REFUNDING
CONTINUED FROM PAGE ONE.

present in any one year per cent bonds
for exchange for the Is without the cir
culating privilege in an amount exceed
ing per cent of the total amount OF
bonds on deposit with the Treasurer by
said bank at the time OF the passage OF
the act. At the expiration of twenty
years every holder of 2 per cent bonds
then outstanding shall receive in ex,
change per cent bonds of like denomi-
nation, payable twenty years from date
of issue. At the end of the twenty years
all bank notes outstanding are to be re-
called and redeemed by the national
banking association issuing the same
within n period and under regulations TO
be prescribed by the Federal Reserve
Board. Any notes still remaining IN cir
culauon AT the expiration or this perlod
are to be secured by an equal amount of
lawful money deposited in the Treasury
of the United States by the banking as
ISOLATION originally issuing such notes.
More Power to Board.
The bill in its original form provided
that one-half of the net earnings Of the
Federal reserve banks shall be paid into
the surplus fund. The trainers OF the
measure have made a change apparently
to correct an oversight, qualifying this
with the words. after dividend claims,
as herein provided, have been met"
The bill as altered gives the Federal
Reserve Board more positively the right
to cancel the membership of any State
bank or trust company in the Federal
reserve scheme. There are one or two
other changes which strengthen the con-
troll of the Federal board over State
banks and trust companies which par
ticipate in the new system.
he hill in re nrIgfnal form nFOyidRd
that each member of the Federal Reserve
Board, appointed by the President, shall
serve for a term OF eight years The
bill as now drawn Qualities this with the
words, unless sooner removed for cause
by the President"
The bill as first Endorsed by the admin
istration authorized and empowered the
Federal Reserve Board ito examine at its
discretion the accounts and books of each
Federal reserve bank" The new bill
makes it read, THE accounts, books, and
affairs of each Federal reserve bank"
Banks to Fix Rates.
The paragraph under section IL of the
bill which empowered the Federal Re
serve Board to fix the rate of discount
for the Federal reserve bank has been
dropped altogether, and the following
Paragraph has been added to section II.
every Federal reserve bank.
Every Federal reserve bank shall
have the power to establish each week,
or as much oftener as required, subject
to review and determination of the Fed
eral Reserve Board, a minimum rate Of
discount to be charged by such bank for
each class of paper. which shall be made
with view to accommodating the com
merce of the country and promoting a
stable price level"
The bill as originally drawn and in
dorsed by the administration provided
that whenever any Federal reserve bank
paid out or disbursed Federal reserve
Treasury notes. 1t should hold in its
cwn vaults gold or lawful money equal
to 80 l-3 per cent of the Treasury notes
so paid out by II. As amended, the bill
provides that any Federal reserve bank
such Treasury reserve notes
shall "segregate in its own vaults, AMI
shall carry to a special account on its
books gold or lawful money Of the
amount mentioned above.
Section g of the bill, as II was first
announced. provided that every Federal |
reserve bank should at all times hav5 |
on and in its own vaults in gold or Law |
full money a sum equal to not less than !
s 1-3 per cent of its outstanding demand |
liabilities. which shall at the same time |
be not less than % 1-3 per cent of its |
Federal reserve notes.
The latter part of this section. begin |
ming with the words. which shall at the |
same time" has been dropped.
The bill was Immediately referred 20 |
Senate and the House.