Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1913-08-15


mean it in that way, but they are both
doing team work, and good team WORK
il is too.
CHANGES IN THE CURRENCY
BILL.
;; dubuque Telegraph Herald.]
Among the changes in the Glass
Owens currency bin as il emerges
from the house committee is one foz
an increase of dividends to be paid
by federal banks to member banks
This is eminently just. Under the
original draft member banks were en-
titled to per cent dividends. Il
earned on their stock in the federal
bank, the remainder Of the profits to
be carried to the surplus fund of such
federal bank until this fund reached
20 per cent of its capital. Any new
bank becoming a member was to pay
the book value of the stock: il this
value happened to be $40 per share
the new member bank would receive
only l-6 per cent on its investment.
The change doubtless provides that the
rate of dividend. If earned, shall never
be less than enough TO yield approx
! ma oely 5 per cent on the book value.
The creation Of a national advisory
council Of bankers. The strong est OBJ
lection Of ba mixers to the new bill is the
shsence Of practical bankers on the
federal reserve board, only one OF
whom must be a man Of banking ex-
pe.7ence. wirnou, changing one iot1
the powers OF the federal reserve boar d
the house committee assuaSes The
bankers with the creation Of a national
advisory council OF bankers, one 81
whom likely VIII be elected by each
federal bank and serve purely IN aE
advisory capacity to the federal re-
serve board. Chairman Glass is said
TO favor this suggestion and ne can
not Out believe II viii prove mutually
helpful and tina. the information and
banking experience Of such advisory
council will on occasions be mos:
sought after and welcome to the fed
eral reserve board, especially in 'he
event Of requiring one federal bank 70
discount the paper Of anGaer federal
bank; in a question OF s,as,,ens,on OF
the reserve requirements. and IN the
issue and retirement OF notes TO fed :
eral bankA
federal bank shall no. be emitted By
another federal bank gu, returned to
The bank Of issue This is IN the in
;erest Of aexibility and q guard against
imitation OF treasury notes. Under
present conditions national bank notes
are received and paid by national
banks without thought az 10 the
bank Of issue. and are only receeme d
when so mutilated or sOi1kd az To be
unusabls. with the result that the ay
erage lie Of national bank note il
estimated to be two years compared
with the ten days o. q Bank Of Eng
land note. When redeemed the ma
,ional bank note is Immediately reis-
sued. thus making such currency rigid.
inelast:c currency. The change. above
noted, foroids the Chicago federal re-
serve bank tfor exanple) TO pay ou;
over its counter notes OF another. say
St. Louis federal reserve Bank. and re-
quires il 10 return sameieo the st
Louis federal reserve bank
Authority TO the federal reserve
board to Issue an unlimited volume OF
government notes. A long look ahead
into the future appears 70 have actu-
eted this amendment, as the amour,
OF notes fixed by the original bill
would seem TO have served ali. II no,
possible. at least probable con-
tingencies. The psychological effect o,
this change must not be overlooked.
Charge of a profitable interest rate
by federal bank required to dis
coun, the securities Of another fedora
| bank. In the original the power v-as
O-x he fc%c ~
Quire one federal bank 20 discount
another federal banks paper but moth
ing was said as to the rate. The
amendmen, makes the transaction {
| profitable one as il by right should be
! There may be times when one fedora
bank may have SO large a percentage
of idle funds that il would gladly dis.
count the paper Of another fedora
bank at the prevailing discount rate:
out when one bank thru superior ma n
Sgemeat CT foresight, al more o.
! less critical stage. has a large percent
age OF reserve and another has not
the discounting bank. If required to d.
SO. is entitled to a profit for parting
| with its funds and the borrowing
banks should pay the price Of getting
itself out Of bad place.
Authority for banks in central re-
; serve cities sixty days after the pas
sage Of the law to reduce the reserves
from Is to 20 per cent Of their de.
posts. The original bill provides To-
! the same reduction after twenty Sid
/: months.
OF the four appointees by the presi
dent to the federal reserve board NJ
more than two shall belong to tn,
same political party evidently {
means towards keeping the board un
partisan and out Of politics.
Permission to national banks. un
| der certain restrictions, to open say
ings and trust company departments
The details of these amendments vii
no, be know until the bill comes from
/, the printer. but the last feature OF ,
trust company department viii. we be
lieve. be acclaimed with pleasure sine
It opens an avenue Of PROFIT now clooel
to the national bank and which u
many instances has been met BY tn
incorporation Of the banks stockhold
ers Of a separate organization for tina
purpose.
1880 Mines In ths United oestss.