Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1913-12-20
EXPECT TO PASS
BILL BY TONIGHT
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interlocking directories in banks In
the new system.
A Complete Reform.
A complete reform of the vast and
complicated machinery Of finance,
banking and currency will be accom-.
plished by the bill. Its fundamentals
provide:
The issue OF currency, guaranteed by
the government, based on notes and
bills. representing commercial trans
actions and backed by a gold reserve.
The new currency Is expected to con-
tract and expand to meet the varied
demands of. trade.
The concentration of the bank re-
serves Of the country in regional 1nst1-
tutions, capitalized by the banks OF
the country and controlled by directors
elected by the banks.
The creation of a market for the
negotiable commercial paper which
forms the bulk of the assets of the
banks, where, in time Of stress, these
assets may be easily and without loss
transformed into cash.
| The establishment from eight to
twelve great regional banks through
out the country, which will Issue cur
rency, re-discount paper and centrallZe
and mobilize the reserves of the local
| banks.
| The creation Of a federal reserve
board Of seven members appointed by
the president, with final powers of con-
troll and supervision over the entire
system.
In the foregoing general principles
the bill Is practically the same that
passed the house. But in phraseology
and more or less important details,
hundreds of changes have been made
by the senate.
The senate has retained, after a
contest, the house plan to have each
regional bank, a bank of banks" with
the directorate controlled by the mem
Der banks and the capital furnished
BY enforced subscription of national
banks. Senator Hitchcock Of Nebraska
aided by the republicans, made an in
effectual fight to make those institu-
lions public utility banks owned by the
public and controlled by the govern
ment.
AS amended by the senate the bill
provides for the creation OF eight to
twelve regional banks, as the necessity
may develop.
! Under the house bill, the earning OF
the regional banks after paying five
per cent dividends on the stock and
establishing 20 per cent surplus,
would have been divided among the
member banks and the government.
The senate has amended the bill SO
that the stockholders shall receive a
six per cent dividend, a surplus fund
of forty per cent of the capital shall
be established and that the remainder
of the earnings shall be divided, one
half going to the government as fran
chise tax and the remainder founding
"a depositors' insurance fund" to reim-
burse depositors In falling members
banks.
The senate had broadened material
ly the character of the commercial
paper which may be eligible for re-
discount and which may be used as a
basis for currency. Under the house
bill only paper maturing within 80
days was available but the senate az
ter a contest broadened the provision
to include a percentage Of six months
paper in order to accommodate smaller
banks in rural communities, which
handle little short time paper.
Senator Cummins presented an
amendment to authorize the regional
banks to loan direct to individuals on
proper security, If the banks in the
! borrowers community we're unable
or unwilling" Several republicans
Joined democrats against it and 1t was
beaten At to 33.
Senator Newlands declared he had
several changes which he wished to
propose to the measures but said he
would prefer to have the democratic
caucus first pass on them. He began
An agitation for a further caucus OF
democrats.
An entirely newly fiscal policy was
Oh opposed in an amendment by Senator
Weeks but voted down "A to 40. 1t
proposed that the surplus in the treas
ury at the end of each fiscal year
should be applied to reducing the ma
tional debt.
An amendment by Senator Burton to
deprive the federal reserve board Of
power to suspend all reserve require
ments was defeated Al to 81.
! Senator Bristow proposed that the
board be prohibited from suspending
the requirements as to the gold reserve
against circulating notes. Senator
Root declared that without the amend
ment the board could nullify the pro-
vision written into the bill last night
to check depletion Of the gold reserve.
Senator Owen pressed for a final
vote on his bill as a substitute for the
house bill, but Senator Burton declar.
led he had several amendments to pre-
! ! 1910