Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-20
CURRENCY BILL
PLANS SLOW
CHANGES
Thiry-eight Months Allowed for
Adjustment to Its Conditions.
Provisions Made Public.

WASHINGTON. June 2o.-Repre-
sentative Glass. chairman OF the
House Committee on Banking and
Currency, has just made public the adj
ministration currency bill which viii
be introduced In the House and Sen
ate after President Wilson has deliv-
cred in person his address 10 Congress
on Monday.
That there may be no disturbance
Of business, So months are allowed
by the bill for gradual change TO meet
its requirements.
An outline Of the measure prepared
by Mr.. Glass describes il as "a basis
for legislative action" states that il
will be gone over in detail for altera-
tions. and sets out that its purpose
is TO accomplish three principal OBJ
jects.
Provision Of a means for redis-
counting commercial paper Of speci'
fed types
A basis for elastic notes properly
safeguarded.
Machinery for doing foreign bank
ing business.
The measures essentials remain as
they have been outlined from time TO
time since the President began study
of the subject with House and Senate
leaders. Secretary McAdoo and other
advisers, providing twelve or more
Federal reserve banks which viii re-
discount paper deal in Government
securities, exchange and conduct Gov
eminent fiscal operations. National
banks and such state banks and trust
companies as conform to standards
would be stockholders of the reserve
banks The Government would hold
no stock,
Complete U. 8. Control.
The Government would control the
Federal reserve banks entirely through
a Federal reserve board Of seven
members in which the banks woold
have no representation The board
would be composed of the Secretary
of the Treasury, Secretary of Agrlcul-
ture, the Comptroller of the Currency
as members ex-officio; four other
members would be chosen by the
President and confirmed by the SEN
ate
The national bank note circulation
would remain undisturbed and no pro-
posal Us made in the bill for retiring
approximately 5000 600. 900 2 per cent
bonds, upon which that note issue now
rests An amendment or separate bill
10 refund those bonds into per cent
bonds may be introduced later
In addition TO the 500 600 900 exist
ing national bank notes, not more
than $500. 600 600 In what are to be
known as Federal reserve treasury
notes might be issued at the discre-
tion Of the Federal reserve board
solely for the purpose Of making ad-
vances TO the Federal reserve banks,
which would do no business with the
public, deal only with their member
hanks and receive deposits only from
the United States
Notes to Be Secured.
While the notes would on their
face purport TO be the obligations Of
the United States. they would be re
quired to be secured by "a gold re-
serve of 33 l-3 per cent, provided by
the Federal reserve bank, would be a
first and paramount lien on all the
assets Of these banks and would be
redeemable in gold on demand at the
Treasury Department in the city of
Washington or any Federal reserve
bank.
Stringent provisions are made
against counting any of these notes
as a part OF bank reserves, and the
system is guarded against imitation
by lodging power with the Federal
reserve board 10 exact an interest
charge upon the treasury notes in or
der TO secure their prompt redemp-
ton. The notes are not made legal
tender, but would be receivable by
the Government and every bank Of
the system at par without exchange
No change would be made in the
protection OF other existing notes
The Federal reserve board would
require one Federal reserve bank TO
rediscount the paper of another, and
would establish a rate of discount
not necessarily uniform for all re-
serve banks, but made with view
TO accommodating the commerce OF
the country and promoting a stable
price level
50 Months For Change.
For reCasting the present bank re-
serve system the bill proposes to
transfer thee reserves from national
banks in the present reserve and cen
trail reserve cities TO Federal reserve
banks, carrying the process of trans
fer over thirty~eieht months to
avoid shock to market conditions
The bill proposes, according to Mr.
Glass statement ultimately the es-
adjustment Of "a reserve system i'm
which country banks will have Is per
cent of reserve q. e., Is per cent Of
total demand liabiliues). such Is per
cent 10 be held s per cent i'm the bank
vaults, 8 per cent with the national
reserve bank and per cent either at
home or with the reserve bank. while
reserve and central reserve city banks
have abilities, of which 10 per cent
viii be at home 5 per cent with the
reserve bank of the district, and 5 per
cent either at home or with the re
serve bank"
An eminent superintendent of