The chronicle=news., 1913-06-20
CURRENCY GILL
n !. MADE PUBLIC
Continued from page l.)

would remain undlsturbed and no
proposal Is made In the bill for re.
tirinE approximately $7OO.OOO.OOO 2
per cent bonds upon which that note
issue now rests. An amendment or
separate bill to refund those bonds
into three per cent bonds may be In
troduced later.
In addition to the t7OO.OO0.00O ex.
istinz national bank notes not more
than $500. 900. 900 In what are to be
known o. federal reserve treasury
notes miKhe be Issued At the discre-
tion Of the federal reserve banks.
which would do business with the
public. deal only with their member
banks and receive deposits only from
the United States. While the notes
on their faces. would purport 10 be
the obligations OF the United States
they would be required to be secured
by q gold reserve Of 33 Ia per cent
provided by the federal reserve bank
and would be II first paramount lien
on the assets OF these banks and
would be rcdeemable In gold on de-
mand Of the treasury department At
the city OF Warrington or any feder-
al bank.
Stringent provisions are made
against counting any OF these notes
ax part Of bank reserves and the
system is guarded against initiation
BY lodging power with the federal re-
serve board to exact an interest
charge upon treasury notes In order
to Insure their prompt redemption.
Tho notes are not made legal tender.
but would be receivable by the gov
crnment and every bank Of the syx-
TEN AT par without exchange.
No change would be made In the
protection Of other existing notes.
The federal reserve board would re-
quirc one federal reserve bank to re-
discount the paper Of another and
would establish rate on discount
not necessarily uniform for all re-
serve banks but made with u view i'
accommodating the commerce OF the
country and promotinS q stable price
cvel.
For recasiink the present bank re-
serve system. the bill proposes u
transfer the reserves from National
hanks to the present reserve and CEN
trail reserve cities TO federal reserve
banks. carrying tho pv"rcss Of trans
fer over ihiriy-eikhi months to avoid
shocx 10 meet the condition.
The bill proposes. according to Mr..
Oiass' statement. ultimately the cs-
sabilahmcnt of = reserve aysiem In
waieh country hanks vii. have l:
PER cent OF t~s~sve u. 9. Is per cent
Of total demand liabiliicsl such .
per cent to h. held five per tcnt In
the hanks vaults. five PER ceas With
the national reserve banks aad five
per cent either nj home or with the
reserve hanks. whi reservr and cen
trail reserve city banks have reserves
Of 90 pcr cent on demand liabilities
Of which 10 per cent will bc al home.
pr cont with the reserve bank Of
the dis,ric, and : PER cent either at
home or with the reserve bank" the
s,sicmcnt says.
The presumed effect Of tails plan
will bc to end the placing Of re-
scrves with central reserve city
banks. for use In stock market orcr-
aiions. to keep reserves In some meas
urc at home. and to require st'ccnia'.
ots TO get the funds they need Ia
their operations either by directly
borrowing them from rcrsons who
hold them and want to lend the cash.
or else by borrowing from tho banks
In place. where such are to be car
ricd on.
B.. The bill l. based on the belief
that no one, shon Il participate in the
control o: the unanoiay syatcm ua-
less he Is financially interested him
self. or chosen BY those who are. cx-
ccpt In 40 far as the government stsps
In and aascrts the authority OF the
whole community. With this in mind
the system has bes n devised 10 as to
provide for the continuation Of exist
Ing national banks with their organ
isation powcrs and functions un-
changed. In addition there In cstab-
liahcd . systcm Of federal reserve
banks, which are Incorporated thsei-