Delaware City press. (Delaware City, Del.) 1913-19??, 1913-06-27


merclal Paper, Establish Basis For
Elastic Notes, Safeeuarded, and
Create Machinery For Foreign Bank
Ing usiness-National Bank Notes
To Remain.
Washington. - The administration
currency bill was made public by Rep
resentative Glass, chairman of the
House Committee on Banking and
Currency. 1t was introduced in the
House and Senate after President Will
son delivered in person his address to
Congress.
An outline of the measure prepared
| by Mr. Glass describes 1t as "a basis
for legislative action" states that it
will be gone over in detail for altera-
tons, and sets out that its purpose is
TO accomplish three principal objects:
Provision of a means for rediscount-
ing commercial papers of specified
types
A basis for elastic notes properly
safeguarded.
Machinery for doing foreign banking
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 ~ or more federal
reserve banks, which will rediscount
nanar doaI in pnvarnnoant cenuritiac
exchange and conduct government
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.
The government would control the
federal reserve banks entirely through
a federal reserve board OF seven mem
brs. in which the banks would have no
representation. The board would be
composed OF the Secretary of the
Treasury, Secretary of Agriculture, the
Comptroller of the Currency as mem
bers ex-officio; four other members
would be chosen by the President and
confirmed by the Senate.
NATIONAL Bank Circulation.
The National Bank note circulation
would remain undisturbed and no pro
posal is mG The bill for retiring
approxius 200 two per
ti cent Bonds lat MT isss
now rests. nj or sepal
ate bill 70 " 4ose bonds int
three per cent. bonds may be intro
duced later.
In addition to the $7O0,0OOO00 exist
ing National Bank notes, not NOR
than $500,000,000 in what are to b
known as federal reserve treasur
e notes might be issued at the discre
= ton of the federal reserve board solel
r for the purpose of making advances t,
g the federal reserve banks, which woul
S do no business with the public, dea
b only with their members banks an,
y receive deposits only from the Unite
8 States. While the notes would, o.
6 their faces, purport to be the obliga
/ tons of the United States, they woul
J. be required to be secured by a gol
r reserve of SO 1-3 per cent. provided b.
e the federal reserve bank and would b
III ~ anu pdl tlllAOulll lltll VII Illl III
u assets of these banks and would b
redeemable in gold on demand at tn
. Treasury Department of the City @
u Washington or at any federal reserv
. bank.
Preventing Initiation.
n Stringent provisions are mad
r. against counting any of these notes a
part of bank reserves and the syster
e is guarded against imitation by lodt
a. ing power with the federal reserv
IT board to exact an interest charge upo
e. treasury notes In order to insure thei
n promised redemption. The notes ar
not made legal tender, but would b
10 receivable by the government an
8. every bank of the system at par Will
Is out exchange. No change would b
ID made in the protection of other exis
Is ing notes.
IN The federal reserve board would r
e, quire one federal reserve bank to r.
I'd discount the paper of another an
"a would establish rate of discount M
g. necessarily uniform for all resery
le banks, but made with a view to a
70 commodating the commerce of til
sr country and promoting a stable prit
level.
~ For recasting the present bank T
serve system the bill proposes
10 transfer the reserves from nation
~ =. banks in the present reserve and ce
j., tral reserve cities to federal reser1
u, banks, carrying the process of tran
~ fer over SS months to avoid shock
e market conditions,