Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1913-06-28

ing, which seem 10 indicate the con
trary. despite the fact that the meas
ure has the backing of the administra-
ton. Every point In the bill, as pre-
scented. was carefully gone over by
President Wilson and Secretaries Bry-
an and McAdoo, and it Is understood
that several of its most important pro
visions were directly fathered by them
For the convenience Of the busy
man. the following official digest Of
the measure will give a definite idea
of its scope and aim:
Digest of the Bill.
The purpose OF the bill Is TO furnish
a comprehensive revision of the cur
rency system of the country so rs to
obtain -four principal objects:
First.~pr Provision Of a means for re-
discounting commercial paper Of speci-
fled types.
Second. Provision OF a basis for
elastic note issues properly safe
guarded.
Third Provision Of machinery for
doing foreign banking business
I'm order to accomplish these pur-
poses fully it is necessary to repeal
certain portions of existing law; TO
reetIfy various conditions In the pres
ent national banking system which are
In some cases only indirectly connect
ed with the objects sought; to furnish
new class of Institutions for the per
Torrance OF some functions which
cannot well be intrusted to existing
banks. or, at all events, can better be
performed by others and TO alter the
present reserve system to a very ma
terial degree.
The scope of the bin can best be
understood by an analytical review Of
its contents
The present banking situation in the
United States rests upon the national
bank act proper as slightly modified
from time TO time and upon the so
called Aldrich.Vreeland act (act Of
March 80. 1909. OF these acts the
latter is completely superseded on the
ground that 1t has never become oper-
alive, probably win not become opera
tive except under extreme stress and
was never satisfactory.
The national bank act itself is mod
fled In numerous essential particulars.
In separate measure a general revi-
sion of the administrative provisions
of the national bank act will be pro
vided.
New Glass of Banks.
Fundamental to the idea of the bill
Is the creation of a new class of banks
to be known as federal reserve banks.
the chief points about which are as
follows:
First.--The number is to be twelve,
with possible increase later as pro-
vided.
Second.-The ownership Is to be In
the hands of the stockholding banks
OF the twelve districts in which the
reserve banks are situated The ma
tional banks are compelled to be men,
bers, and state banks and trust COM
panies are permitted to be members.
Third-The capitalization is to be 20
per cent of the capital of the stock
holding banks. one-half paid I'm and
one-half subject to call
Fourth.-The business Of these fed
eral reserve banks is to be as follows:
tal Rediscounting Of paper presented
by stockholding banks under specified
conditions, provided such paper grows
out OF actual agricultural, commercial
or Industrial transactions and does not
run more than a specified number OF
days.
(b) Buying and selling government
securities, gold and silver bullion and
foreign coin, foreign exchange and
open market bills OF given maturity.
(c) Government fiscal operations.
Every national bank Is allowed to
continue its note issue exactly as at
present, and IN addition federal reserve
treasury notes are authorized to be is
sued TO an amount not exceeding $500.
100000, These notes will upon applica-
ton be issued 10 the federal reserve
banks upon short time commercial pa
per and other liquid collateral While
the notes will ON their face purport TO
be the obligations Of the United States.
they are required to be secured by a
gold reserve of 80 10 per cent provided
by the federal reserve bank and are
first and paramount lien on all the as
sets OF these banks and are redeemable
In gold on demand at the treasury de
partment in the city OF Washington
or at any federal reserve bank. Strin-
gent provisions are made against count
Ing any OF these notes as q part of
bank reserves, and the system is guard
ed against imitation by lodging power
with the federal reserve board to exact
an interest charge upon treasury notes
In order to insure their prompt redemp-
tion. The notes are not made legal
tender. but are receivable by the gov
eminent and every bank of the system
at par without exchange No change
Is made ia the elements Of protection
afforded existing banknotes.
Overseeing the whole system ifs ere.
sted a federal reserve board consisting
Of seven members. including the secrs-
a., tva.4rfst. tho eafrQturV of