Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-24

the House Committee on Banking
and Currency, has made puclic
digest Of the Administrators cur
rency reform bill which he intro
duced in the House to-day BY the
terms of this measure the Federal
Reserve Board. which viii control the
issuance Of new currency on appi-
cation of the regional reserve banks,
lie to be a Government board en-
tirely.
There will be no retirement Of ex-
| listing national bank circulation. nor
| OF the existing per cent United
States bonds used for circulation pur-
| poses. Every national bank is al
lowed to continue its note issue ex-
actly as at present.
Following is the digest prepared by
| Representative Glass:
THE purpose Of the bill Is to fur
nish a comparative revision Of the
| currency system Of the country so as
| TO obtain three principal objects:
'First-Provision Of a means for
rediscounting commercial paper OF
! specified types.
Second Provision Of a basis for
elastic hote issues properly safe
| guarded
Provision OF machinery for
| doing foreign banking business.
present Law inadequate"
TN order to accomplish these pur-
poses fully II Is necessary to repeal
| certain portions OF existing law, to
rectify various conditions in the pres
ent national banking system which
are in some cases only indirectly con
| he
| furnish new class OF instructions for
the performance Of some functions
which can not wen be intrusted to ex-
| listing banks, or. at all events, can
| better be performed by others, and to
| alter the present reserve system to
very material degree.
The scope OF the bill can best be
| understood by an analytical review
Of its contents.
The present banking situation OF
the United states rests on the nation
al bank act proper, as slightly modi-
| fed from time to time, and on the So
called Aldrich- Vreeland act (act Of
May 80, 19OS).
| "Of these acts the latter Is COM
pletely superseded on the ground that
/ II has never become operative. 1t
! probably viii not become operative
except under extreme distress, and
never was satisfactory. The nation
al bank act itself is modified in nu-
merous essential particulars.
New Glass Of Banks.
! fundamental to the idea OF the bill
| is the creation Of a new class of
banks to be known as Federal re-
serve banks, the chief points about
| which are as follows;
The number is to be twelve, with
/ Faf.E 18Th Ia
| The ownership is to be in the
hands OF the stockholding banks OF
the twelve districts In which the re-
| serve banks are situated National
| banks are compelled to be members
and State banks and trust companies
are permitted to be members
| The capitalization is to be 20 per
cent Of the capital of the stockholding
banks, one-half paid in and one half
subject to call
THE business Of these Federal re-
serve banks is TO be as follows:
Reserve Banks Business.
Rediscounting of paper presented
| by stockholding banks under speci-
fed conditions, provided such paper
| grows out OF actual agricultural, COM
| mercial or industrial transactions and
| does not run more than a specified
I number Of days.
| Buying and selling Government
| securities, gold and silver bullion AMI
| foreign coin; foreign exchange and
| open market bills of given maturity;
| Government fiscal operations.
Every national bank Is allowed to
| continue it's note issue exactly as at
| present and in addition Federal re-
| serve treasury notes are authorized
| 10 be issued to an amount not exceed
| ing $500 100000.
| These notes will. upon application
! be issued to the Federal reserve
| banks upon prime short time com
| mercial paper and other liquid col
| lateral
Gold Reserve Security.
while the notes will. on their
faces, purport to be the obligations
| Of the United States, they are re-
quired TO be secured by a gold re-
| serve Of 3S Ia per cent provided by
! the Federal reserve banks. and are
first and paramount lien on all the
assets of these banks. and are re-
| deemable in gold on demand at the
I Treasury Department in Washington
or at 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 to exact an interest
| charge on treasury notes in order 20
| insure their prompt redemption.
The notes are not made legal ten
der but are receivable by the Gov
/ eminent and every bank of the sys-
| TEN at par without exchange.
! Overseeing the whole system is
! created a Federal reserve board, con-
! sisting Of seven members, including
the Secretary Of the Treasury, the
| Secretary Of Agriculture and Comp