South Bend news-times. (South Bend, Ind.) 1913-1938, 1913-11-21
THREE SEPARATE
CURRENCY BILLS
BEFORE SENATE
Original Bill, Democrats Draft
and Republican ReCommen-
dationS Are Ready to be
Acted Upon.

WASHINGTON. Nov. 2I.-Final
preparations were made Thursday for
the battle over the administration
currency reform bin on the floor of
the senate. which Will begin Saturday.
Unable 10 agree on amendments
the committee will present the Glass
owen bill as originally endorsed by
the administration and passed by the
hoAsse The measure with amend
ments assumed 10 be acceptable 20 the
president. will be submitted by Chair
man owen and five other democrats OF
the committee. Senato~S Pomerene.
Hollis. Reed, O'Gorman and ShafrOth
A bill materially changing the struc-
ture Of the house measure Will be
presented by the republicans. Sena-
tors Nelson, Weeks Bristow, Nc
Lean and Crawford and Sen. Hitch
cock.
Agree on Reserve Banks.
All three OF the proposed bills con-
template the issuance Of a currency
secured by the prime commercial pa
per held by the banks OF the country.
Each proposes the establishment OF
reserve banks which will issue the
currency In exchange for commercial
paper TO the banks, which will hold
the reserves behind their deSpOsits,
and which will rediscOunt the paper
held by banks in the system thus
keeping available always ample credit
and currency for use 10 ward off
financial crises. Each bill proposes
10 put the entire system under control
OF a federal reserve board to be ap-
pointed by the president.
Although agreeing as to the pur-
poses 10 be accomplished by the pro-
posed legislation, the three plans diff
fer in almost every point IN attempt
ing 60 carry out these purposes.
As il passed the house, the Glass
owen bill proposed the creation OF II
regional banks. The democrats OF
the senate committee cut that down
to eight the minimum number the
president was willing 10 accept The
republicans reduced the number 10
four, holding that the smaller number
could more effectively concentrate the
reserves Of the country.
Banks Would Elect Six.
The IL regional banks proposed By
the house bill would be owned BY the
banks, through compulsory subsCrip-
ton TO the stock, and the banks would
elect six OF the nine directors of each
regional institution. This plan was
retained by the democrats of the SEN
ate committee. although IL was fur
Their provided that If the banks did
not furnish enough capital TO run the
system. the stock might be sold to
the public.
Sen. Hitchcock and the republicans
materially changed the bill. They
provided that the reserve banks CAPT.
tai should be subscribed by the pub
lie, the banks taking whatever part
the public would not take, and that
the government through the federal
reserve board should appoint five OF
the nine directors of each regional
bank. This was the proposition which
split the senate committee into two
camps
Each Of the bills materially reduces
the present reserve which National
banks must hold against deposits
The house bill would fix the reserve
at 2 per cent for country banks and
Is per cent for banks in present re-
serve cities. The republican wing cut
down the reserves OF the city banks to
10 per cent.
In the house bill the paper made
eligible for rediscount and as a basis
for currency is commercial paper,
based on actual merchandising trans
actions, maturing in not less than 90
days. This provision viii be retained
by the democra in the senate COM
mittee. but the republicans brOadened
IL materially. Under their bill part
may be made in paper maturing up
TO six months. The provision gives
the advantage to banks with small
capital which have little SO called
short time paper.
Would Have Discretion.
Under the house bill and the draft
by the senate committee democrats
the regional bank directors would
have discretion as to rediscOunting for
member banks without limit In the
republican bill each member bank is
given the right to secure rediscounts
up TO the full amount of its capital
and. under a tax. TO twice that
The gold reserve 10 be held by the
regional banks In their vaults and in
the treasury against the new circula
ton Is fixed at SO Is per cent I'm both
the house bin and the measure drawn
by the senRfe committee democrats.
The republican draft. however. pro-
vides for SO per cent reserve. with
a tax on reserves below that figure
down 10 minimum Of % per cent.
The house bill provided for redemp-
ton OF the new notes in gold OF law
full YnOnpvff "a the fraa crrry- or "a the