The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1913-11-17
The Glass-Owen Currency Bill.

bank was solid and secure but had it's assets
loaned out on interest; when abnormal de-
mand was made for cash it was unable to call in
it's loans, convert them into currency and meet
the demands. A panic resulted that sent many
q well organized business to Davy Jones' locker.
At each harvest time when the farmers of
ths~land over short of cash and need money
te,pay for help and other unavoidable bills, cur
rency grows scarce and stringency results Be
cause of this demand has been made these
Many years for more elastic currency.
The Glass-Owens currency bill intro
duced into the house plan for meeting these
conditions. According to the provisions of this
now famous piece of legislation reserve bank
organization committee, composed of the secre-
tary of the treasury, secretary of agriculture
and comptroller of the treasury, will designate a
city I'm each of certain selected regions as re-
serve city. Each national bank in the region
would have to subscribe for stock in the federal
reserve bank. At present, country banks keep
On hand reserve of at least IL per cent of
deposits, and each city bank 20 per cent. Under
the proposed new bill at least one-haf of this
reserve would be placed in keeping of the federal
reserve bank
&c is also planned to have the reserve bank
place one-half of it's own earnings in reserve I'M
til the amount totals 20 per cent of deposits.
Of the remaining half part will be paid to the
government and part to the national banks.
The chief effect of this bill would be to break
the back of Wall street speculation. At present
surplus credit is shipped on from bank to
another until finally it reaches Wall street.
Those banks pay a return on it of about per
cent. Where do they get the money? By maxi
ing short-time loans to spectators. These loans
are always well secured but they could not be
made if the banks had not on hand large
amount of surplus credit.
This 'pyramiding of credit" would be impos-
sibe under the law as proposed and thus
Wall street plunging would become lost sport.
Short-time loans could not be made, because the
banks would have nothing to make them with.
A federal reserve bank will have the power
to discount any commercial paper, providing
is endorsed by national bank in the re-
gion, but the federal reserve board has the au>
thority to specify what classes of commercial
paper shall be so dscountable.
Further, the bill provides that bank in a
reserve district shall be permitted to loan money
on unincumbered farm lands providing the
amount does not exceed SO per cent of its value
and the time does not exceed nine or twelve
months
At the recent national convention of bankers
litical control of our banking SYSTEM which
would be made inevitable if it were to be man.
aged by presidential appointees, and they depre-
Gated the sectional control of currency which the
plan would make possible. They argued that
we need home rule in the banking business. And
they also strenuously objected to the number of !
reserve banks, claiming one-half would be suf-
ficient.
But speaking of objections, it won't be hard
to guess where the most strenuous halls from.
Any measure that strikes at those estimabe
persons who inoulge in the great sport of specu-
latlon of the Street is certain of attack And
they have been attacking. According to a reli- |
able source, the opposition to the bill of which
so much was made at the bankers convention
was inspired by the Wall street institutions
They coaxed the country bankers" to serve as
q stalking horse in order that the country might |
not catch on to their trick of knitting the Glass
Owen bill. And because of their close ties and
obligations the country bankers willingly became
the cats paw with which desperate effort is
being made to haul Wall street chestnuts from
the fire.
But the bill is good one essentially and will
almost certainly pass, though in a modified
form. And If any person is somewhat impatient
of the slow process of getting it passed let him
try his own teeth on the currency problem. If
he is interested in before breakfast athletics we
ing until Christmas, at least
knitting the Poor