The Washington herald., 1913-09-25
CREDIT men URGE
CHANGES IN BILL
Object to the Words '0r
Lawful Money" in Cur
rency Measure.
ARGUMENTS AT HEARING
Secretary Tregoe Favors Reduction in
Suggested Number Of Federal
Reserve Districts.

]. H. Tregoe secretary and treasurer Of
the National Association of Credit Men,
told the Senate Committee on Banking
and Currency yesterday that the words
"or lawful money" used in conjunction
with the word gold in the various
places in the Glass bill, should be stricken
from that measure. Mr.. Tregoe said that
the National Association of Credit Men,
representing more than 17,20 business
houses in tn United States, the agree
gated capital of which had never even
| been calculated, was practically unit
in the expression Of this desire.
With the opening statement that the
| currency bill was, in the main, accep-
table and satisfactory to the credit men
of the United States, Mr.. Tregoe went
on TO explain five changes in the Glass
bill, which, regardless of the friendly at
titudL of the National Credit Mems As
sociation, the special committee appointed
| by that organization deemed esAntial to
the perfecting of the measure. He said.
| further, that there were a number OF
minor changes which his committee was
prepared TO present TO the Banking and
Currency Committee, but that they were
suggc tive character, and that their
| inclusion in the currency statute OF the
United states might perhaps be better
effected after the organic currency law
had been approved by the President.
Fewer Reserve Banks.
The first Of the five suggested changes
which the credit men deem essential Is a
material reduction in the minimum num-
b-r of Federal reserve districts and Fed
eraI reserve banks required by the pro-
posed act. viz twelve. This number, the
leredit men think, should be reduced.
They consider that three for beginning
would be sufficient, but that five or six
reserve districts should, for the present
be sufficient
The second change suggested was that.
in view of the fact that the Federal Re
serve Board will possess great powers
and is TO perform public function Of
far-reaching Importance, its members
should be above suspicion Of political con-
troll Mr. Tregoe also suggested that the
lowers of the advisory board should be
materially increased, that the advisory
board should Sbe allowed to select its
officers, and two of such officers should
receive salaries and maintain an office
Immediately adjacent to the Federal Re
serve Board itself, and that these two
members of the advisory board should
attend all meetings of the Federal Re-
serve Board. with equal privilege TO the
boards members, with the exception OF
the voting privilege.
The third change refers to the notes
of the reserve bank. II was in discuss
ing this paragraph of his statement that
Mr.. Tregoe made the definite assertion
regarding basic money. He said:
''The Federal reserve notes should not
be the obligation of. nor should they be
guaranteed by, the government, as there
is no provision in the bill for the Treas
ury to acquire and to maintain the gold
reserve necessary for their redemption.
They should be the direct obligation OF,
the bank that issues them, and redeem
ed by that bank in gold on demand"
Interest on All DEPOSITS.
The fourth proposed change was that
the Federal reserve banks should pay
interest on all deposits If they pay in
terest on government moneys. Credit
men urged that there should be no pre-
ferred depOsitors in Federal reserve
banks. The fifth objection presented
was the section of the bill governing
savings departments in national banks.
The credit men think the provision
should be stricken out entirely. They
express the fear that unless the closest
scrutiny is exercised by the Federal Re
serve Board. nearly all the functions
performed by the commercial depart
ment of a bank should be exercised by
savings departments upon a very small
and inadequate reserve.
Breckenridge Jones. president of the
Mississippi Valley Trust Company, OF st.
Louis, discussed the position OF State
banks and trust companies unGer the new
bill He suggested amendments of the
measure which would place State banks
and trust banks on the same footing with
national banks. Mr.. Jones expressed the
opinion that the corporate powers of
trust companies would be allowed to re-
main.
Throughout yesterdays discussion in
the committee the fact became more and
more evident that there is a distinctly
unfrIendly attitude developing within the
committee against immediate currency
legislation. This sentiment is reflected in
every question presented by the acting
chairman, Senator Hitchcock Almost
ever representative of the Middle West
eIR interests have impressed the COM
mittee with the fact that there is a we'll
defined opposition to the twelve regional
reserve banks. Mr.. Breckenridge Jones
urged reduction of the number to five
He said that such action would give all
the necessary decentralization, without
creating too many reserve banks
Prefers Central Bank Idea.
A. H. Comstock, of Duluth, who told
the committee that he had been in the
hardware business since 1864, and that
his concern conducted the second largest
wholesale hardware business in America,
appeared for the group of Northwestern
business men. He told the committee
that he preferred the one great central
bank idea of, the Aldrich plan, and that
number of branches were equally eff
cient as a number of regional reserve
banks. He expressed the view that the
rediscounting privilege would not be
availed OF by the big city banks He
thought the country banks would so
avail themselves.
H. c. Clark, of Minneapolis, followed
Mr.. Comstock, and discussed the absence
of any necessity for immediate action
on the currency bill, in SO far as the
Northwest was concerned. He was fol-
lowed by W. c. Winston, also of Minnie
apolis, who took the same view,
Alleged Hotel Thief To be Tried,