Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1913-12-31
MAKES REFORMS IN CURRENCY SYSTEM
New Money Measure Most important Law Relating to Finance
Enacted in Many Years-Saient Features of the Code
SuccinctB Explained.


faances of the country Is one OF the
g,fesss ssrreaching measures relating 10
f5gzuce that have been enacted III
many years
The magnitude of the subject. Tue
diversity of interests affected ana the
leaxsh Of the debates in both branches
or eouSress has to follow the changes
zsfss sraaD tae essentials of this nlgnly
eecb1sea5 measure in it's Important
hearings on money, finance, banking
and stse entire range Of fiscal suDJects'
ugfsfc and private. which 1t anects.
Summary of the 6ll.
y7yzsh, view therefore, Of present
nx snccinctIy and in non-technlcai
language al epitome of the salient lea-
frf-g.s Of the measure as finally framed
the following summary is given OF the
5FFE as a whole and of its principal De
caJIs-
Generally speaking, the first steps
10 be taken to bring into operation the
uar5oa's new financial system will be
through an organization committee
Consisting of the secretary OF the
&rsasury. secretary of agriculture ana
c7srf1oiler Of the currency.
BANKS have so days within which TO
f5fe the4r applications for membership
ia The new system. and one years
efaae Ii allowed before the government
VIII compel the dissolution OF any ma
fl0naI bank that refuses TO join.
WlH take Up the Slack"
Tbs new law viii make little direct
change IN the operation Of the pres
eat national banks, except to allow
farm 20 loan a certain amount Of their
Em-zsss 1pon farm mortgages.
It's chief purpose is to add new
elees az machinery TO the banking
system that will take up the slack"
during the changing business condi-
lions Of each 4year; that will give the
banks a place to quickly convert their
assets into cash in time of need, and
tftzt VIII bring out new federal cur
x-euCy when it is needed, and retire 1t
7ghen money becomes cheap"
Banks are now required to keep
certain percentage of their deposits as
eereseryss.r part in cash in their own
vaaIfs and part OF which may be re-
deposited in the banks of New York,
Chicago. st. Louis and other designat-
ed cities.
Ia times of sudden financial de-
E1lands. when banks have loaned up to
the full limit of their resources, these
reserves furnish little relief because
If theY are paid out to meet demands
ens Banks are left in a precarious con-
ditiOn.
Basic Principle of Law.
The basic principle of the new law
s. 70 get these reserve funds out into
circulation when necessary without
ke.zsseuing the safety of any bank, and
~ provide a place to which local
Baais may rush in a crisis and get
xasb for the prime commercial pa
per- they hold in their vaults.
This is TO be accomplished through
A chain of regional reserve banks; or
reservoirs OF reserves" in which all
banks shall deposit a stated part of
<he money they are required to hold
as reserves
Under the new system, when a
@finaacfa3 furry comes the banks can
take commercial paper, such as notes,
drafts and bills of exchange, to these
reservoirs" and secure the use OF
aflsssr OWE reserves, or, if necessary,
even the reserve of other banks, oy
@ieD,siting this security
The new regional banks will re-
ceFye about one-haif Of the bank re-
serves 1f the country They in turn
VII be permitted to loan back to the
banks all but 35 per cent. of these
rs.aerxes, so that in case OF emergency
millions Of cash can be brought out
1nTo circulation quickly.
The banks will have to pay for these
Ecans, however, as individuals have to
gay fsr a~Aoan from any local bank,
ard tnis charge is expected to prevent
rhe too nee use of the reserves held
BY the regional banks.
New Paper Currency.
a new form OF paper currency is
also provided for, to come out In case
OF emergency, and which is expected
U ss back into the hands of the gov
ezrszruent when times are normal.
7neae treasury notes" win be printed
hy gsfe government and issued through
tss.n regional reserve bank, and will
bear efass guarantee both of the re-
zICnaI bank and OF the government.
The following analysis presents the
DETAILS OF tue new law without adj
herring closely to the technical division
o or language OF the measure:
At the head of the system will stand
a federal reserve board at Washing
eon, appointed by the president. and
70 consist OF the secretary of the
treasury, the controller of the curren-
esy and Eve other members. Two of
these shall be expert bankers, but
none shall have banking affiliations or
own bank stock during their service.
This board will exercise general con-
4zreI over the endre system.
The temporary organization COM
xnfttee," or the federal reserve board,
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