Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-09-03
KIND OF CURRENCY
BANKERS FAVOR
Tell Senators Notes Should Be
Issued by Federal Re-
serve Board.

WASHINGTON. Sept. 3.-The kind
of national paper currency the Amer
lean Bankers Association would like
established in place of the United
States treasury notes proposed by
the administration currency bill was
outlined to the senate banking COM
mittee today by bankers, who de-
clared they did not favor asset cur
rency or notes secured by the general
credit of individual banks because of
the danger of wildcat" banking.
I'VE believe the notes should be is
sued by the federal reserve board to
the banks and by them to the pub
lie, and that all the federal reserve
banks should be responsible for the
whole issue of notes" said Sol WEEK
Ter, of New Orleans, one of the
spokesman for the recent bankers
conference at Chicago.
Wexler was asked by Senator Reed
il a system giving greater elasticity
and enabling bankers to convert their
assets into cash through a rediscount
bank would not prevent panics.
With such privileges there prob
ably. could be no panic arising from
the same causes that produced the
last Two, EdlQ "eXleT.
Suggestions upon which the bank
ers dwelt with chief emphasis were:
That the banks, rather than the
Federal treasury. issue currency.
That a central bank, or not more
than five regional banks, would be
preferable to. the proposed twelve re-
gional reserve banks.
That membership of national banks
| in the new Federal system should be
optional, not compulsory, as the bin
provides.
That the amount of regional reserve
bank capital for which each national
bank must subscribe should be re-
duced from 20 per cent. to 10 per
cent. of the subscribing banks cap
| ital.
That one regional reserve bank
should not the compelled to rediscount
the commercial paper held by an
other.
proposed system of twelve regional
reserve associations 1t would be i'm
possible to secure enough capital II
some districts to make up the mini
mum of $1,000 0o They declared
many changes must be made in tht
/ bill, including the reduction in the
amount of capital required to be
| taken by each bank. IL the 1900 State
banks and trust companies were to be
| induced to enter the new system.
Objections to the provision giving
the central board the power to remove
regional reserve board director were
based on the belief that this would
make regional reserve directors timi6
about using their judgment in pass.
ing on commercial paper. The bank
ers also objected TO the government:
agent in each district acting as chair
man of the local board of directors
on the ground that he would be un.
| familiar with local conditions and
| that he had no direct interest in tn,
| welfare of the bank
The suggestions made by the bank.
ers' committee. that representation b,
| given to the banking interests on thu
Federal reserve board, were met will
a counter suggestion by Senator
| Weeks (Republican), which it Is un
derstood will be advanced as a posi-
| BILE amendment when the Senate com
mittee begins consideration of the bill
This was that the bankers of tn,
country should be allowed to submit
to the President list of fifty or 10
men, and the President be authorized
to select from this list the four mem
DeTS OF the fedefdi reserve BOARD
whose designation would rest witt
| him under the bill.
/ I'VE do not ask or expect that mel
named to the Federal reserve boar,
should remain members of any bank,
said Mr.. Forgan. "Our contention il
that banking is profession, that cal
be learned only by experience. ant
men who have servec as banker
1 should have a voice in the administra
ton of the national banking system
Senator Reed asked If the bank
| were not responsible for TIN suspen
sion of payments in the panic o
1907 Mr.. Wexler replied the bank
withdrew their deposits from New
York and to that extent contributes
to the stringency. He said large de
| posits carried by country banks wit
| the large city banks were an ele
ment of danger whenever none.
stringency arises.
Samuel Untermeyer, of New York
counsel for the money trust investi
/ eating committee. was present toda,
at the request of Chairman Owen
He rrobably will later present al
|