Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-10-23

shall not rediscount for any one bank an
amount exceeding the capital and surplus
Of such bank.
THE bank may buy in the domestic
market from member banks, non-member
hanhs and individuals self-iiquidating pa
pers under conditions to be defined in the
act. bearing the Endorsement of mem
Der bank, and may buy In the foreign
market prime bankers bills.
The bank also may deal in gold,
coin and bullion and in obligations of
insular possessions.
Uniform Discount Rate.
1.-The board of the federal reserve
banks shall establish minimum rate
of discount which shall be uniform at
all branches and subbranches. and
which shall be changed from time to
time as conditions demand.
The federal reserve bank shall be
au horiZed to issue it's circulating
notes. Such notes shall be secured by
the segregation of rediscounted paper.
Gradually and over such periods as the
federal reserve board may decide upon
the federal reserve bank shall offer to
purchase 2 per cent bonds of the United
States deposited to secure circulat ng
notes of national banks at par and up to
an amount equal to one-haf of such
bonds deposited with the treasurer of
the United States as security for NATIONAL
bank note circulation. Upon acquiring
these bonds the federal reserve bank
shall receive from the government of the
United States in exchange for the per
cent bonds an equal amount of year
exchequer notes bearing 3 per cent in
terest.
The bill should provide for a national
clearing house"
Alfred Grin Crozier Of Illinois, a lawyer
and student of banking and currency,
upon which he has written several
books, told the committee that the Glass
bill, II enacted into law, would turn over
to the twelve proposed regional reserve
banks all the currency of the government
and all the government funds. and that
these regional reserve banks were merely
central banks privately controlled
He declared the federal reserve board
did not have adequate powers for the
the representatives of the bankers and
stockholders In banks would have g.
| majority in the controlling boards Of the
regional banks.
Power to Declare Rediscount Rate.
Mr. Crozier also advocated granting
| the federal reserve beard the power to
declare, from day to day. the rediscount
rate to be charged the member banks
He advocated decentralizing the bank
reserves by providing that all banks keep
a reserve of 15 per cent, and that per
cent should be kept in cash IN the vaults
of the banks; that 5 per cent should be
placed in the regional reserve banks. and
another per cent should be aced in
any of the member banks of the system.
In this way. he said, 1t would be pos
sible to prevent the piling up of reserves
in few large cities.
Mr. Crozier declared that if such sys-
TEN had been in use in 1907 there would
not have been a panic
While Mr.. CroZier was being heard
Mr.. Vanderlip and Jacob S. Coxey, who
ed the Army of Il e Unemployed'' to
Washington twenty years ago, sat side
by side, waiting to give their views Oh
currency reform to the committee.
Will Start to Frame Bill.
AT an executive session following the
hearing yesterday afternoon the COM
mittee decided to begin the work of
fran ng the currency bill next Monday
morning in executive sess,o Senator
O'Gorman expr sssed himself as hopeful
that the committee would be able to
complete this work within ten days. pos
sibly a week. He said that he hoped,
too, for q unanimous report on the meas
ure, as the members of the committee
were getting closer and closer together
in their opinions of what the bill should
contain. If the committee reported
unan 'rnously. he said, the debate in the
Senate should -ast long. and it might
be possible to ,,uss the bill during No
vember.
The committee decided to call in ex-
perts to help them in fran ng the bill
Among them will be Charles A. Conant
of New York
H Parker Willis, who advised the House
committee in the preparation OF the bill,
was requested to appear tomorrow.
Proposes New Scheme.
Taylor vinson of Huntington, W. Va,
proposed an entirely new banking and
currency scheme. He suggested the for
nation of Treasury bank" through
which the government itself should issue
currency and extend rediscounts to ma
tional banks He recommended that the
collectors of internal revenue be made
branch officers of this bank, to pass on
credits. pointing out that they would have
at their disposal as credit information the
returns under the income tax law.
Tells of Refusal of Loan.
R H. Long of Massachusetts, told the
committee of being refused credit by va
r,ous New England banks. when he en-
deavored to combat the United Shoe
Machinery Company, Senator Weeks,
who sad he was a director Of one of the
banks in question. declared that the
transaction was a usua one. and that
Mr. Long was refused loan simply
because OF his credit condit on.
The effect of the new law on national
banks in Hawaii was called to the COM
mittee's attention by l. T. Peck. cashier
of the First National Bank of HaWa l.
He said the bill not only did not adm t
the insular banks into the new system
but that it prejudiced privileges they
now enjoyed under the law. He asked
that the Hawaiian banks be allowed TO
reta n their charters under present con-