Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-01-13


that the fault lay in the system it.
SELF
THE currency bill just passed is
the result of continuous thought and
discussion from 1907 until now; at
| first by bankers, and latterly by al
classes of men interested in provid-
ing modern system of banking cred
it, one which will not break down
utterly at the time when it is most
needed.
"The new system is a marked i'm
provement in FIVE particulars, the
first two of which are especially i'm
portant
1T provides a centralized system!
Of bank reserves as compared with
thousands of scattered ones.
1T provides a system Of rediscount-
ing by which banks may sell their
best paper to the federal reserve
banks when the demand for loans
from their customers is greater than
can be supplied, instead Of being fore
ed to stop making new loans and call
old ones.
1T provides that cash held in the
general fund of the United States
treasury 1882, 832,915 on Dec 1. 1922
may be deposited with the federal
reserve banks, thus putting back into
the channels of trade millions of dol
lars now as useless as though they
were not in existence.
Provides More Stable Market
ut provides larger and more
stable market for first class CONNER
cial paper. and, incidentally. favors
commercial and industrial develop.
ment and discourages speculation,
because every bank will want as much
paper as possible of the kind that may
be rediscounted with the federal re-
serve banks. defined by the act as
notes, drafts and bills of exchange
issued or drawn for agricultural, in
dustrial or commercial purposes, or
the proceeds of which have been
used, or are to be used, for such
purposes. Such definition shall not in.
clude notes. drafts or bills covering
merely investments or issued or
drawn for the purpose of carrying or
vcstment securities, except bonds and
notes of the government of the Unit
ed States. Inasmuch as paper taken
by the federal reserve bank is to be
discounted, banks may be compelled
to stop taking demand notes, and to
discount their customers notes, as is
the custom for all commercial paper
sold through brokers.
Sees improved Business Ahead
ut allows national banks with a
capital of $1,0O0,00O or more to es
tablish foreign branches, and thus will
enable American bankers, for the first
time, to handle very large amounts
of business now passing through the
hands and adding to the profits of
English, German and French bank
ers
1.-The local effect of the new law is
certain to be beneficial. While some
deposits of country banks will be
withdrawn, the reserve requirements
are changed enough to more than Off
set any such decrease, and the amount
of money available for loans will be
greater rather than less. If there is
but one federal reserve bank on the
coast, at San Francisco, it is almost
certain that a branch will be estab'
lished at Seattle, whose directors. be-
ing men thoroughly acquainted with
local conditions can pass intelligent
ly and quickly on all paper offered
for rediscount. The result for Ia
coma is certain to be decidedly good
look for business in the northwest
and throughout the whole country to
improve very much during the next
year or two"