The Miller press. [volume] (Miller, S.D.) 190?-current, 1913-12-25
BILL
SOON BE LAW
Nc~ Measure Expected To Be
Far-Reschips

and finances Of the country, which
has now been passed by boti,
branches of congress and goes be
fore PresidcnS Wilson for his sigma
ture, is one ofthe most far. reach.
ing measures relating to finance that
has been enacted in many years. The
magnitude Of the subject, the DIVER
sity Of Interests affected, has made
1t difficult for the ordinary observer
to follow the changes and grasp the
essentials of this highly technical
measure in It's important bearings on
monev, finas.se. banking and the en-.
tire range Of fiscal subjects. public
and private. which IT affects.
Generally speaking. the first steps
to be taken to bring into operation
the nations new financial system will
be through the organization Of q
committee consisting Of the secretary
of the treasury. the secretary of
agriculture and the comptroller of
the currency. Banks have 60 days
within which to file their applica-
tions for membership in the new
system; and one years time is allow.
ed before the government will COM
pei the dissolution Of any national
bank that refuses to join,
The new law Will make little d.
rect change in the operation Of the
present national banks. except to al
low them to loan a certain amount
Of their funds upon farm mortgages.
Its chief purposes is to add a new
piece of machinery to the banking
system hat will take up the slack
during the changing business condi-
tons of each year; that will give the
banks a place to quickly convert
their asseSts into cash in time of
need, and that will bring out new
federal currency when it is needed.
and retire ii when money becomes
cheap"
Banks are now required 20 keen
q certain percentage of their depos'
its as reserves, part in cash in
their own vaults and part of which
may be redeposited in the banks OF
New York. Chi ago, st. Louis aut
and other designated cities.
The basic principle Of the new lau
is TO get these eserve funds out into
circulation when necessary, without
lessening the safety of any bank
and TO provide a place to which Ioca
banks may rush in a crisis and get
cash for the prime commercial
paper they hold in their vaults.
This is to be accomplished through
a chain Of regional reserve banks
or reservoirs of reserves" in which
all banks shall deposit a stated par
of the money they are required I,
hold IN reserve.
The new regional banks will re
ceiye about one half of the bank re
serves of the country. They, il
turn, will b. permitted to loan bacl
to the banks all but So per cent o
these reserves, so that in case o.
emergency, millions Of cash can b.
brought out into circulation quickly
The banks will have to pay for thes'
loans. however, as individuals have
to pay for a loan from any loca
bank: and this change is expected t
prevent the too-free use OF the re
serves held bv the regional 1anks.
A new form Of paper currency i
also provided for, to come out il
case OF emergency, and which is ex
pected to go back into the hands o
the government when times are nor
NAL.
II the demand for currency in an
section of the country exceeds tn
supply of circulating money, a nat
ional bank a secure this new none
from the government and put it int
circulation; but a gold reserve o
forty percent, and commercial pape
equal to the full value of the nets
must be held as a reserve benin,
each note so issued.