The Washington times., 1913-07-17
REACH AGREEMENT
ON-BOND SYSTEM
House Committee Members
Finally Come Together on
Currency Feature.

Democrats Of the House Banking and
Currency Committee have finally
reached an agreement on the amended
bond refunding' section of the cur
rency bill, and today the currency re-
formers continued a lively discussion
Of the rediscount features Of the
measure.
Chairman Glass issued a statement
giving the text of the so-called bond
refunding" provisions of the bill He
also asserted that there had been a
disagreement in committee over that
section of the bill authorizing one Fed
eral reserve bank to rediscount the pa
per of another Federal reserve bank.
This clause was still in dispute when
the committee adjourned last night, and
its discussion was resumed at noon to-
day.
AS finally drafted by the Democrats.
that section Of the bill providing for the
retirement of the per cent bonds, upon
which national bank note circulation
IS based. does not withdraw arbitrarily
the circulation privilege from such
bonds. They are to be exchanseo
gradually for 8 per cents. without cir
culation privilege, or redeemed at par
with interest at the end OF twenty
years: As long as the bonds are out
standing however, notes may be issued
against them according to the provis-
ions of the proposed new law.
Text of Section.
The text of this important section OF
the bill, made public by Chairman
Glass, reads:
Upon the application, the Secretary
OF the Treasury shall exchange the
per centum bonds of the United States
bearing the circulation privilege there
tofore deposited by any national bank
ing association with the Treasurer OF
the United States as security for cir
culatirg notes for 3 per centum bonds
of the United States without circulation
privileve, payable after twenty years
from date of issue, and exempt from
Federal, State, and municipal taxation,
both as to income and principal.
Every national bank may continue
tn apply for and receive from the Comp
troller of the Currency circulating notes
under the conditions provided by this
act. but no national bank shall be per-
mitted to issue circulating notes of any
description or to issue or to make use
of any substitute for such circulating
notes in the form of clearinghouse
certificates, cashiers checks, or other
obligation not specifically provided for
under this act, and no national bank
shall in any one year present per CEN
fum bonds for exchange ir the manner
hereinbefcre provided to an amount
exceeding per centum of the total
amount CT bonds on deposit with the
treasurer by said bank at time of the
passage of this act.
May Exchange Bonds.
Should any national bank fail in any
one year to so exchange its full quota
of 2 per centum bonds under the terms
OF this act, the Secretary of the
Treasury may permit anv other national
bank or banks to exchange bonds in ex-
cess of the per centum aforesaid in an
amount equal to the deficiency caused
by the failure of any one or more banks
to make exchange in any one year, al
lotment to be made to applying banks
in proportion TO their holdings Of bonds.
At the expiration of this act every
holder of United States per centum
bonds then outstanding shall receive
payment at par and accrued interest
After twenty years from the passage
of this act national bank notes still re-
naming outstanding shall be recalled
and redeemed by the national banking
associations issuing the same within a
period and under regulations to be pre-
scribed by the Federal reserve board,
and notes still remaining in circulation
at the end of such period shall be Sc
cured by an equal amount of lawful
money deposited in the Treasury of the
United States by the banking associa-
fions issuing such notes