The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1913-12-25
THE CURRENCY
BILL PASSED
Main Features of what Will
Be the New System
When Signed.

and senate committees have come to
an agreement on the forty-three
points of difference, some minor and
some of greater importance, between
The legislative bodies, and the bill
will become law with the signature
of the president.
The passage of the bill gives as
surance of a much better financial
system than the present one. This
1t appears, Is conceded by all; and
1t Is also admitted by many of the
prominent democrats that the bill
could have been improved in a num-
ber of its prominent features, espec-
Tally that OF the regional banks, which
are TO be controlled by board Of
nine directors, six of which are to be
elected by the banks themselves, thus
practically taking them from under
control of the government, except
for the general government supervi-
sion by the Federal Reserve Board.
This objection to the bill was clear
ly set forth by Senator Borah on the
A-Nh ihoe. III al dOiC duuleSS UelOT0
the Senate, in which he quoted such
recognized democratic authorities as
Jackson and Jefferson, and the great
statesman Webster, to sustain his
contention that this feature of the
new bill is radical departure from
all precedent as well as a violation
of government fundamentals. The
federal reserve notes are to be is
sued only upon the application of the
regional banks, and as these banks
are controlled by board, six out of
the nine members of which are
chosen by the banks, they have DOW
er to contract the circulation, as
these reserve notes cannot be forced
into circulation through those banks
by the government in case a money
stringency should arise; but can only
be issued on application of the re-
gional banks. Senator Borah, and the
rest of the minority, insisted that the
control of these reserve notes should
be held absolutely within the hands
of the government
Aside from this feature and few
other points which might have been
improved, the new law renders pan
les remote contingency The prac-
teal agreement of the two parties
on the main structure of the new
! monetary system renders that part
secure against disturbance, while the
Objectionable features may be rem
ed1ed at later date
The bill mobilizes the bank reser-
yes by establishing eight to twelve
regional reserve banks which are to
carry large proportion of them. The
number of regional banks has been
subject of contention between those
who hold that greater strength is
gained by placing the reserves in the
single reservoir of a central bank
and those who, through fear of the
great power which would be welded
by central bank would divide re-
serves among eight or twelve small
er reservoirs, as the bill provides.
The provision for transfer of funds
between regional banks, it is contend
ed, will serve the purpose of pipe
line by which a depleted reservoir
can be replenished by a full one.
Regional banks are to rediscount
commercial paper having three
months to run, and agricultural pa
per having six months to run, for the
member banks In certain ratios 70
their capital they may discount bank
aeceptances and accept drafts and
bills of exchange covering imports
ana cSTorts and domestic shipn. .nts
of goods having six months to run.
These are accommodations to be Civ
en- member banks. Regional banks
may also conduct open market opera
tions in the same kinds of paper.
They must clear checks for their mem
bers for reasonable charge. Gov
ernment funds are to be deposited
in these banks
National banks must, and State
banks and trust companies may, be-
come members of the regional banks
of their district by subscribing six
per cent of their own capital and
surplus. No regional bank is to
start with less than $4,000, 900 cap
ital and, II the stock Is not all tax
en- by the banks, the balance Is to
be offered to the public. II not then
subscribed, it is to be taken and sold