The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1913-12-25
THE CURRENCY
BILL PASSED


by the government. Regional banks
are to receive per cent cumulative
dividends. OF the remaining profits
one-half to be paid to the government
ment as a franchise tax and the
other half Is to be accumulated in
the United States treasury as a de-
positors' insurance fund.
The new banks are to be organic
ed and. to a certain extent, CONTROL
ed by Federal Reserve Board, COM
posed of the secretary of the treas
ury and six others. appointed by the
president. at salaries of $4,000 a
year. The six appointed members
are to hold office for six years, one
retiring each year, and at least two
must have had experience in banking
or finance. The board Is to fix dis
count rates weekly; to examine and
report on regional banks, and sus-
pend or remove their officers for mis-
conduct; to suspend and administer
any such bank which violates the
law; to permit or require one region
al bank to discount paper of another
at rates fixed weekly; to supervise
the issue of Federal Reserve notes.
This board Is to be assisted by
Federal Advisory Council, composed
of one representative elected by
each regional bank board. Each reg
ional bank is to be governed by
board of nine directors, of whom six
are to be elected by the members
and three appointed by the Federal
Reserve Board.
This section of the bill which is
most essential has caused much con-
troversy as 1t has to do with the fed
eral reserve notes, or asset currency,
and the retirement of national bank
notes, which are one of the most OBJ
jectionable features of the present
system. Federal reserve notes are
to be issued by the Federal Reserve
Board, upon application of regional
banks, and are to be secured by de-
post of discounted bills to their par
value, also by a reserve of 40 per
cent in 'gold or lawful money" The
federal boards powers, In this mat
ter are of negative character
only. A graduated scale of tax
Is imposed on notes when the
reserve falls below 40 per cent
These notes are to be redeemed
In gold at the treasury or
in gold or lawful money" at any
regional bank. National banks may
retire their notes by selling, through
the Federal Reserve board, to the
regional banks the bonds which Sc
cure them. The regional banks may
then be required to take out new
notes to an equal amount ON the
same security.
The criticism made on these pro
visions is that they furnish an open
ing for initiation and for draining
gold from the treasury. Being redeem
able at regional banks with gold or
lawful money, the new notes may be
paid in greenbacks, gold certificates
or silver, which Is worth only so
cents on the dollar. These are not
money, as Mr.. Bryan and others of
his way of thinking imagine, but are
only promises to pay money
Thus the bank would be paying one
promise with another, but when fed
eral reserve notes are presented at
the treasury, they are to be paid in
nothing but gold. An opportunity is
thereby created to renew the endless
chain by which the treasury was
drained of gold during the second
Cleveland administration. An at
tempt has been made to remove the
bad effect of these provisions by a
section re-affirming the gold stand
ard and empowering the govern
ment to issue bonds in order to Sc
cure gold
Powers of national banks are large
ly extended. Country banks are per
mitted to make farm loans for five
years limited to 25 per cent OF their
capital and surplus. National banks
of 100000 capital or more are per
mitted to establish foreign branches.
BY creating discount market for
commercial paper and by forbidding