Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-10-28

/, their present use for speculative pur-
poses in the great centres and en-
ployed in the development of business
throughout the country. For in
stance, it is estimated that from New
York will be taken between $50 and
300 millions of dollars to be dis
tributed properly throughout the
United States in the twelve Federal
reserve districts. Yet, because of the
manner in which this money is held
today only a few men will be hurt
by the distribution and the country at
large benefited by coming into its
own"
ut would seem as though the new
system is mainly based on proper
mobilization of reserves"
Exactly. What else can save this
country in times of stress? With the
reserves modified the Federal re-
serve banks are an absolute power to
stop panics; they will have the basis
of an elastic currency, and the funds
to support broad market for agricul-
tural industrial and commercial
paper, as l mentioned before.
/ There can be no forced contraction
| of currency and the expansion must
be natural, not an illegitimate infia-
ton. To illustrate that statement:
! The Federal reserve bank establishes
a rate of interest on paper 1t handles
| for the banks of its districts. The
Federal Reserve Board cannot delib-
erately force this rate down, or up,
any more than the bank directors can
make it to suit themselves. The two
bodies must work in conjunction,
! thereby compelling the desired equita-
BILE effect.
"A false boom is not healthy, as
| i. ~
new bill in such times the boom ten
dency will be overcome by the proper
tax on loans Then the man who
needs money for legitimate business
purposes is willing to pay a higher
rate of interest, while the other man
who actually has not a right to the
money for purposes of imitation, will
not pay the price.
There are features of the bill
which should be plain to any one
even though he has never studied OIL
dabbled in matters pertaining tc
finance. (The features enumerated by
Mr. Bulkley are given in the box al
the beginning of this article.
Briefly speaking, these important
provisions provide twelve banks In
the various sections of the country
known as Federal reserve banks
whose equal capital stock of not less
than $4,000, 900 for each bank, is made
up from subscriptions by the national
banks in the district. Besides, the
privilege is extended to State banks
trust companies and State banking
associations. The board of directors
is so constructed as to take care OF
all interests. Over the federal reserve
banks is the Federal Reserve Board
appointed by the President, and with
a wide range of power. These two
different bodies cannot work at cross
purposes, thus making a safeguard
as I just explained.
Quick Relief Idea.
: "a glance at the requirements OF
: the new law will show that in times
of emergency money can be shifted
from one part of the country to an.
other, providing quick relief. AS tc
, the suspension of the legal reserve
. requirements the placing of the grad.
uated tax on the deficit is such as tc
induce the national banks to make il
up as quickly as possible. The Fed
eral reserve notes must be immedi.
ately redeemable in lawful money or
demand. The security behind oul
currency must be such that it can be
readily liquidated, without forcing
sales and without depending upon the
willingness of investors to buy. Ir
other words. the security behind ou1
currency must be liquid assets, moi
fixed investments,
Mr., Buckley, do you believe the
! present currency bill offers a sure
, solution to the periodical financia
| upsets of the United States?"
; Most assuredly | do. l honestly
, feel that in this measure we have
, guarded against every possibility Of 6
) repetition of past financial disasters
, When in operation the panic of 1907
for example, could not be repeated
OF course, there may be future con.
ditions to be guarded against. but W.
cannot theorize concerning them, but
, must wait and meet them at Tho
proper time. | know once contract.
: ed a disease which / didn't know ex.
listed and there is always a similar
possibility in the framing of an i'm.
portant law. But this much is abso
/, lutely fixed, we have builded a firm
foundation and we have covered al
) present defects. We can do no more.
Brilliant Wedding at Panama
PANAMA, Oct. 2S.--A brilliant wed
3 ding occurred in the Panama Cathe
: dral last evening, when Miss Ritz