Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-09-23
CURRENCY PROGRAM
UNDER PARTY FIRE
Senate Committee Democrats
Propose Practically to Re-
write Measure.
WOULD DROP THE PLAN
OF REGIONAL RESERVES
Advocate That Asset Currency
Should Be Issued Directly by
the Government.


work Of the administration currency
bill was proposed by Senators Reed,
Hitchcock and Bristow today during
the examination of Samuel Tntermeyer
by the Senate committee on banking
and currency.
Senators Reed and Hitchcock have Wig
orously criticised the provisions of the
bill as passed by the House and as sup
ported by their democratic colleagues of
the committee. Today, in the course of
the examination of Mr. Untermyer, Sena-
tor Reed advanced what he called the
Hitchcock plan"
This plan would entirely eliminate from
the proposed currency system the scheme
Of regional reserve banks. provided for in
the bill as a means of mobiliZing reserves,
as a medium for the issue of the proposed
new currency. and rs a means of central
izinG the security behind the currency.
Government to Issue Currency.
Under the Hitchcock plan these banks
would not be created and the govern
ment would issue currency to the indi-
vidual banks on commercial paper backed
by 20 per cent gold reserve up to 70
per cent OF the capital stock of each
individual bank. This would be in addi-
ton to the present bank note issue.
Senator Reed. in lengthy speech adj
TIC criticised the regional
bank plan as making II G individual banks
'subservient TO combination OF banks
Mr.. Untermyer pointed out that each
bank would be represented In its regional
bank. He opposed the Hitchcock PLAN
as not Offering enough security to the
government for the issue of currency.
Senator Reed suggested a charge of .
per cent interest against the banks to
whom currency Was issued to form q
sinking fund to pay off the government.
THAT is d revival of the bank guar
antee idea. commented Mr.. Entermyer,
Guarantee for Depositors.
We'll, before this bill is passed" said
Senator Reed, Il hope to see n provision
written into it that will make banking
safer for depositors than it is now"
Mr.. Untermyer interrupted the speaker
occa sionaily to defend the regional bank
system. declaring that the directors of a
regional reserve bank would be in touch
with the banks in its district and would be
able TO pass more reliably on the paper
offered by the bank for rediscount.
Mr.. Tntermyer made it clear that in
his testimony yesterday he desired to
deny that the federal reserve board
would be able to use its influence for
political purposes
That seems to me- he said. mot
only improbable, but impossible"
Questions the Security.
Senator Bristow took up his proposal
to eliminate the regional reserve
banks and have the government issue
money directly to the individual banks.
Mr. Cntermyer objected that the gov
eminent would be forced to build. up
elaborate machinery to deal with each
bank. He also declared that the Sc
curity offered by single banks would
not equal in strength the security or a
combination of single banks. all re-
sponsible for the debts of each.
On this point Senators Reid and Bristow
disagreed with the witness, and an eX-
tended argument followed.
The committee was unable 10 conclude
the questioning of Mr.. Cnter7nyer today,
and he will return Monday Senators to-
day were of opinion that three weeks and
possibly month Will pass before the bill
will be brought into the Senate.