The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-05-04
ANSWER
FISCAL Queries
CONTINUED FROM PAGE ONE.

aSSocieuon OF a NUMBER, ana II tno
latter, how many?''
People are afraid Of one central as
ISOLATION. Whether the fear lis justi-
fed or not il another question. but 1t has
been in the minds Of the people ever since
the time Of the first and second banks
Of the United States.
What should be the limit Of the
amount Of such additional currency
An arbitrary amount cannot be fixed.
1t should be sufficient to meet the de-
ma1ds Of legitimate business. No more,
no less.
should it be secured by deposit with
the Treasury, and IL SO. what security
should be permitted?'
II the currency Ii to be issued by
the reserve associations, of course the
security should be lodged there.
f"Should a gold reserve be required as
against an issue Of currency: II SO,
what amount or proportion?'
Custom in England.
England requires such a reserve. The
United States has the largest stock Of
gold in the world and no currency s.
sue should be put out that is not bach ed
by strong gold reserve. The prop r
ton Of gold coin to notes may be tif-
flcult to fix but 1t should be large
cuouBh 10 stduu any strdln tEdt may
be placed upon it. II our gold was
issue of notes 1t would be a larger pro-
portion thereof.
What method of preserving an elastic
condition of currency should be adopt
ed?"
A tax sufficiently high to contract the
volume Of currency when not needed and
low enough to expand it when a larger
volume Is needed.
Should a tax on an additional issue
Of currency be level or graduatedT
Graduated. as to time.
Should a central control of reserve
associations be established either by
them or by the government, or both?'
1t would seem to be impossible to in
duce the American people to give up the
benefits Of government control and to
| secure best results control should be ex-
| ercised by both government and associa-
| ton itself.
SHOULD reserve associations be stock
| companies?"
| Should the liability of each member
bank In a reserve association be limited
or unlimited"'
/ Limited to the amount Of their stock
holdings, as in the case of national
banks
Should reserve associations be con-
| trolled by member banks. and IL so. what
should be the voting power of each
| bank"
| They should be so controlled and the
| voting powers so distributed that no one
or two banks would be able to control
the association in any way. Probably
each memer should have one vote, but
/ IL emulation is necessary to give proper
\ representation to small banks, then 1t
| should be permitted.
| Should reserve associations accept any
deposits except those of banks?
| No. They should not be competitors Of
banking institutions. This is the rock on
which the first and second banks of the
United States split.
Isl suld government deposits be placed
with reserve associations; If 80. at what
ratexkf interest,""
| Tfiey should be properly secured, and
at a nominal rate of interest
| Should national banks be required to
keep their reserves in their own vaults
and with their own reserve association p
Banks should Keep Reserve.
| National banks should keep a greater
part of the reserve In their own vaults,
and the rest either with their own as
ISOLATION or with other banks.
| Should reserve associations be permit
| rate, say per cent
Should reserve associations be permit
tied to discount commercial two-name
paper for member banks?"
Yes; in the judgment Of the manage
ment but it should be commercial paper
under strict definition.
| Should they be permitted to make d.
| rect loans to member banks, and IL so
should security be required?'
I in hot
Should the rate of discount be the
same for all and should this rate be
published weekly"
Most emphatically yes. from an ideal
| standpoint but with the diversified rates
current all over the United States. low
rates for money are. when it is plentiful
high rates for money when 1t is scarce,
running from to IL per cent, 1t would
seem impossible to have uniform rates in
| all States.
| Should the rate on direct loans be
| higher than the discount rate, and should
it also be the same to all?"
| There should be comparatively little
difference in the rates on direct loans
and the discount rate; perhaps a frac-
| ton Of per cent in favor Of the latter
Should a reserve association have
transactions with banks not members
either in its own territory or outside
and If so. what character Of transac'
lions should be permitted?"
In a period of plenty in one section
and a strain in another, the reserve as
ISOLATION in the former might rediscoun1
paper or other secured loans.
"what if any, limit should be placed
on transactions between one reserve as
ISOLATION and another"
There should be limit to rediscount:
In order to prevent one association from
weakening its own resources for the ben
eft Of another, although the character
of the security accompanying rediscount
ed paper might be restricted to high
grade collateral upon which a quick turr
could be made in almost any section OF
the country.