Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-07-05
CURRENCY PLAN|S
DEFENDED BY OWEN
Committee Chairman Makes 1t
Clear He Stood Out for
Government Control.
SAYS MANY OBJECTIONS
WILL NOT HOLD GOOD
Explains Reasons for Opposing
Board of Control Dominated BY
Group Of Bankers.

FNpiainiaE ny details Of TIE evo!u-
ti"n Of the praposed currency reform
plan now before Congress, Senator Rob-
ert l. owen. chairman Of the banking
and currency committee Of the Senate
defended today the plan against attacks
and explained why, In his opinion. many
"f the objections made will not hold
good, He also made 1t clear that II was
he who had stood out for government
control under the proposed system.
few days pfiur to the Presidents
appearance before Consress to urge the
passage OF the currency bill went to
the White House and dictated to q
stenographer In Secretary T,imulty's Of
nee nay reasons for opposing the proposed
representation OF bankers on the federal
board of CONTROL" he said, Copies of
the statement were handed to the Presi-
dent and to the Secretary Of State After
the meeting Of the cabinet that afternoon
the present plan. giving absolute govern
meut control OF the board. wNs agreed
upon. and has been Incorporated into the
bill
First Plans Provisions.
The first PLAN" explained Senator
owen, provided that the boards Of
directors Of the regional banks should
into three classes, Five members were
10 be chosen by the stoekholding banks.
five members by the stockholders Of the
stockholding banks, four 10 be elected by
the ten men or the flrxt two classes and
one to be appointed by the government.
With a board made up In this man.
ner the original plan also provided that
based on the assets Of the banks In sums
not TO exceed twice the capital stock of
the banks, In word, this group OF
bankers would be given absolute author
ity TO initiate or contract the currency
OF the country at will. and without Q
government check on the manipulators.
The federal board % control was to be
made up of forty members selected by
the regional banks and three members to
represent the government.
Logical Result Obvious
The logical result OF such an ar
vangement Is obvious. The first five
men would be named by the directors
OF the banks that owned the stock Of
the regional banks. The next Ave
men would be appointed practically BY
the same voters, since the directors of
banks are generally the heaviest stock
holders. And these ten men, represent
ing scientifically the same interests would
Choose focr OF the remaining I'VE MEM
bcrs Of the boards in control OF the
regional banks.
Moreover. these men would control
the selection OF the forty men the
federal board, against whose opinions
on questions affecting the currency there
could he allied only three voters who
were not controlled by existing banks.
Instead of government. which represents
fre people Of the United States, a group
OF men representing the bankers of the
country would have been given control
OF an Institution vitality important to the
welfare and prosperity of the entire ma
uon. / realized this when / studied the
plan. and that is why I have fought for
government control as provided In the
present Owen-Glass BILL
There seems to be a difference of
opinion in regard to the character of
the commercial paper which may be
and on which currency will be issued.
Exactly what commercial paper comes
under this provision of the new law"
Negotiable paper. the proceeds of
disposal of articles of commerce. For
example. time drafts covering ship
ments of merchandise, wheat, cotton
manufactures. etc. or obligations of
similar character.
Notes Under Bills Provisions.
Il shall make ii clearer. If you are
engaged in business and ship a con-
signment to customer, your time
in your own bank and rediscount
IN the regional bank. Again. If you
have outstanding accounts due on ship
ments TO various customers. your note
for the sum of money represented by
the goods YOU have shipped may be
discounted and rediscounted. Notes, Sc
cured or unsecured, which are not
based on commercial transactions, do
not come under the provision of the
bill
The notes to which you refer. sena-
Tor. and which are made by merchants to
carry them over collection periods, are
a. general rule. Endorsed by some re-
spOnsible person and are classed by the
banks secured paper. Would one-name
ar uuindOrsed notes be available for re-
dScount2' asked the interviewer.
Such notes, usually two-name paper.
but sometimes one-name paper, Senator
owen explained. would cease to be one
name paper when offered for rediscount.
They would bear the Endorsement of the
hank which discounted them. and there
fore become secured paper The original
discounting bank would become the in
dorser in the eyes Of the regional banks
Just as an ordinary indorser Is regarded
today by the existing banks"