Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-08-02
currency REFORM
NOW STEP NEARER
House Committee on Banking
ConIudes Work on Amend
ment to Pending Bill.
OPINIONS GREATLY DIFFER
ON ACTION BY THE SENATE
Deep-Rooted Indisposition to Take
Up Subject at Fag End Of
Wearisome Session.

Wearisome Session.
| BY the action Of the House committet
on banking and currency last evening il
concluding the amendment of the pend
| ing bill. possible legislation at this ses
sion on currency reform has been brought
step nearer. The committee will re-
port the bill to a democratic caucus t
| be held August II, and there is every
hope that the measure will soon there
after be under consideration in the
House.
| Opinions differ as to the action by
the Senate. 1t is we'll known that there
| is deep-rooted indisposition on the part
of many senators to take up such q
weighty subject as currency revision a
| the fag end of a long and wearisome
session devoted to the tariff. One car
| hear predictions freely made around the
Senate that as soon as the tariff is Out
of the way Congress will adjourn.
But President Wilson has iterated ant
| reiterated his desire to have currency
| legislation at this session. If he insists
senators admit that he may in the enc
induce the Senate to remain in session
| and pass the bill.
May Go Over Until December.
Another guess as to the outcome one
hears is this: that the House will pass
the bill, the Senate committee will re
port it, and then it will be postponed te
date certain in next December. when
the long session begins.
49,
that Secretary McAdoo's announcement
of his intention to meet the currency
Stringency at crop moving time should
relieve anxiety as to the money situa-
ton, coupled with the fact that there is
still the emergency currency provision to
fall back on.
So, with these conflicting views, opin-
ions and interests, it is difficult to fore
cast at this time just what Congress
may do with the currency bill.
Few Radical Changes.
The committee on banking and currency
made very few radical changes in the
bill as 1t was introduced by the admins
tration, although the public had been led
to believe by the pulling and hauling in
the committee and reports Of friction that
the bill was being torn to tatters and
patched UP again, day by day.
That minority report will be submit
ted by the ''insurgent" committeeman Is
assured, but it will probably be signed
by not more than three members. The
ed out most decisively the proposed
amendments to issue currency on agricul-
tural products. The advocates of that
plan will carry their fight to the caucus.
The committee, by a vote of to B. also
defeated an amendment prohibiting a
person serving as director on more than
one bank. President Wilson suggested
that this proposition should be considered
apart from the currency bill. 1t was one
of the recommendations of the Pujo re-
port
The most important amendment made
in the bill by the committee was con-
cession to the demands of the banking
interests that they be given some repre-
sentation in managing their own affairs
under the new reserve system. This is a
section creating an advisory board and
is as follows:
Advisory Council Created.
''There is hereby created a federal ad-
visory council. which shall consist of as
many members as there are federal re-
serve districts. Each federal reserve
bank by its board of directors shall an
nually select one member of said council.
who shall receive no compensation for
his services, but may be reimbursed for
actual necessary expenses. The meetings
of said advisory council shall be held at
Washington, ID. c., at least four times
each year and oftener ii called by the
federal reserve board
'The council may select its own officers
and adopt it's own methods of procedure,
and majority of its members shall
constitute a quorum for the transaction
of business. Vacancies in the council
shall be filled by the respective reserve
banks. and members selected to NIL va
cancies shall serve the uneXpired term.
THE federal advisory council shall have
power % to meet and confer directly
with the federal reserve board on gen.
eral business conditions; t2) to make oral
or written representations concerning ac-
tons taken, proposed or contemplated by
said board: 90 to call for complete in
formation and to give advice concerning
discount rates, rediScount business, note
issues, reserve conditions in the various
| districts, the purchase and sale of gold
or securities by reserve banks. open mar
ket operations by said banks and the
general affairs of the reserve banking
system"
Rediscount Section Altered.
Another important amendment incor-
porated in the bill altered the rediscount
| section comforting the power to require
| federal reserve banks to mutually redis-
count paper.
| A change was made in the division OF
] the earnings Of the federal reserve banks
| created by the law. Originally these
banks were allowed yearly cumulative
| dividend of ) per cent and surplus
equal to 20 per cent of the paid in capi-
| tai stock.
| All earnings above these amounts re-
verted TO the government. AS amend
ed the balance of earnings after the
5 per cent dividend and the 20 per cent
surplus will be paid, SO per cent tt
| the government. to be used as sink
ing fund to reduce the national debt
and 40 per cent to be divided among
the member banks in proportion tt
their balances in the federal reserve
bank concerned.
In the reserve section the committee
reduced the period during which &
bank must. hold 20 per cent reserve
against deposits from twenty SIN
months to sixty days. AS finally passed
the reserve section requires that after
a period of gradual changes. the coun-
try banks must keep their Is per cent
| reserves either in their own vaults OIL
in the federal reserve bank of the dis
trict in which it is located.
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