Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1913-12-19

out fear when they knew that IN
time of trouble there would be banks
of refuge and hope. He approved
of the provision of the bill which
limited the loans of the Federal re-
serve banks to commercial, indus
trial and agricultural purposes. He
said great advantage would accrue
to all these interests when the $780,
100000 of resources which would be
provided for these banks would be
dedicated to this purpose and not
used as now for speculative ven
lures. He claimed that this would
insure accommodation to legitimate
business and enterprise. He insist
ed that this safeguarding of these
reserves for this purpose are con-
fessedly needed.
He next discussed the issuance of
currency under the proposed bill.
He insisted that the issuance of cur
rency was a governmental function
and should be controlled by the
Government in the interests of all
tae people and not for the profit of
"a few. He discussed the method
pursued in England, France and
Germany for the issuance of curren-
cy and claimed that the method in
this bill was more elastic and in adj
dition was safer and more prudent.
He said tt at the limit of the cur
r,ncy that c ould be issued under
this bill if the Federal reserve banks
should utilize all of their resources
and possibilities for this purpose
Could not exceed $1,S17, 100000
He stated that the Bank of France
could issue currency to the extent of
ST. ,6O0,000,OOO. He then argued
that on account of the greater bust
ness of all kinds, greater population,
greater need of development and
greater commerce, the exc e;s of
$217,OOO,OOO over France was fully
needed in this country. He then in
sisted that while the currency was
elastic and sufficient, yet it could
nc. produce ;nflat;ori-th.. =. 90.
for currency to be issued, first the
customer must make his application
to a member bank, the member
bank must approve the application
and endorse the loan, then the re-
serve bank must endorse the appli-
cation of this bank and also approve
the loan, and then the Federal Re-
serve Board must approve the ap-
plication before currency could be
issued, and that to secure the cur
rency the security thus endorsed
m lst be deposited and reserve of
IS per cent kept in addition. He
pointed out that this was superior
to and safer than the safeguards in
the banks of either France or Ger
many. He said that the currency
could only be issued when there
was an urgent demand of business
men approved and endorsed by two
banks and the Federal Reserve
Board appointed by the President.
He argued that the passage of the
dill would give both an elastic, suf-
:icient and safe currency. He enum-
grated the advantages to various bus
ness and sections which would &C
rue from this opportunity and how
'anks in time of stringency and |
'anic would be saved from fear,
rouble and doubt.
He rext pointed out the advantag es
7hich would accrue to the country
rom requiring the deposits of the |
United States Treasury to be put in
hese banks. He said that this would |
i've from 1925, 900, 900 to S210. 600, 900, |
ow locked up, for legitimate business
imposes much to- the advantage of
ommerce and trade. He claimed that
ne banks would be very profitable.
nd from conservative estimates made
y experts would yield to the Govern
ant annually profits between S12.-
O0. 900 and $4,000 900, after paying
TX per cent interest on the stock to the
leinber banks. He stated that the
ystem could be inaugural ted without
reducing any contraction of loans
I'd without any disturbance. lie said
lat by reducing the reserve REQUIRE
'nts of all the national banks and
only requiring five per cent reserve
time deposits m IRE than 800, ZOO
70 now locked up in reserves and of
use to business would be released
I'd that the release of this amount of
oney would enable the banks to fur. .
sh practically nearly all the capital ,
I'd reserves required uuder the pro-
'sed plan. He next discussed the ad
ntages which would sccr lie to banl q S
d the customers and their varied f
siness by this system. He argued
1t the reserve requirements under
, new plan were ample and were n
ger than those required In England C.
d France and other countries. He r
proved of the provision permitting =,
ms upon farm lands and the u,e
ended in the bill of loans upon
rehouss receipts given by farmers. c.
deplored that . system of rural w