The Leavenworth echo. [volume] (Leavenworth, Wash.) 1904-current, 1913-12-26
LEADING FEATURES OF
NEW CURRENCY BILL
With Some Exceptions the New Law is
Received With favOr-lts Friends
UnquaIifiediy Praise It


and declares it will make panics un-
known. With rigid inspections, as
provided in this bill, there will be no
such thing as the closing of the doors
of solvent bank, and thus a degree
OF prosperity will be established and
maintained in our country that will
bring peace, security and happiness to
our people"
This may be somewhat grandilo-
quent. Periods of intense industrial,
commercial and speculative activity
must ever be followed by briefer periods
of rest and depression. AS there exists
no tonic panacea for the WEAKNESS or
exhaustion that always overtakes the
individual who runs a hot physical or
mental race, so no Legislative panacea
will ever be found that will safely slim
ulate nation to indefinitely increasing
higher pressure in industry and busi-
ness. Even the wisest and most be-
Inefficient Of currency and banking laws
can not accomplish that.
1t is we'll to bear that fact in mind,
and not to fall into exaggerated expec-
tations that the new currency law is
going to perform miracles.
New Law Is a Vast Improvement
Among bankers, financiers and busi-
ness men who have given to this sub
ject prolonged thought and investiga-
ton the conviction runs strong, how
ever, that the new law will be vast
improvement over our present made
quate, unscientific and antiquated sys
TEN. There is reason to believe that
Senator Shafroth is substantially right
in his opinion that under it there will
be no such thing as the closing Of the
doors OF solvent bank" By what
means will that be made impossible
under the new law2
The new system provides for not
fewer than eight nor more than II fed
eral reserve banks, TO be located at ad-
vantageous points throughout the
United States. One will doubtless
be located at San Francisco, and if the
larger number is established, probably
another at Spokane, Portland or Seattle.
Advocates Of the larger number
have said in the senate that they should
be so distributed as to make it physi-
cally possible for an officer OF any
member bank to board train after
banking hours and be in his federal re-
serve city the next morning. AS one
witness before the senate committee
put it, it should be made possible for
he president OF sound bank who had
reason to fear run on his deposits the
following day, to gather the CONNER
cial paper he wanted cashed, take the
train for the federal reserve city, and
be able to wire by the time of the OPP
ening OF his bank the following morn
ing that he had cashed sufficient Sc
curities to meet the demands of all de-
positors. That action and its resulting
telegram would stop the run.
How the Regional Banks Will Serve
the Public
In what manner is this made feasi-
ble7 It is expected that all the ma
tional banks and large number OF
the state banks will become members
of the eight or II regional federal re-
serve banks. National banks must
Join or forfeit their national charters.
Under the new law, as under the old,
banks are required to hold in reserve
a fixed percentage Of their cash as
sets beyond which they must not make
loans. Under the new law these re-
serves will be largely held in the fed
eral reserve banks. These reserves
will be loaned to member banks that
may need them on their giving, as Sc
curity, the requisite quantity of their
notes or bills receivable, that is, notes
given by their customers. When a
member bank makes loan to mer-
chant, for example, that act is termed
the discounting Of his note. When it
takes that note to the federal reserve