Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-20
Continued From Page 1.

not issue it, and no provision exist
ed by which the Government could
issue additional currency except I'M
der the Vreeland- Aldrich act Of 1908,
which was almost Erohibitive.
Compelled to Control.
When money became scarce in a
locality, the depositors in the banks
would be needing their funds and,
therefore, withdrawing their deposits.
The banks relying on deposits to
make loans instead of being able to
relieve stringency by increasing loans
when good notes were offered, were
compelled to contract loans to meet
demands of their depositors
The banks which should have been
able to relieve the stringency did bust
ness under a system which compelled
them to increase the stringency.
The present law will take the re-
serve out Of the central reserve cities
and keep them in regional banks or in
tn vaults Of the member banks where
they will be free from the specula-
tive use now made of them and where
they can easily be placed at the point
most in need Of their use and where
they will furnish an increased ser
vice and security to depositors in the
banks for whose benefit they are
maintained. The law also furnishes
a means for the ready movement of
currency from one section of the
country where 1t may not be in de-
mand to another where 1t is special
ly needed. 1t will also give elastic
ity to the currency through the is
sue and retirement of Federal re-
serve notes
Lack of Elasticity Worst.
The greatest defect in our recent
currency system was It's want of elias
ticity, the utter lack Of any provi-
sion by which, in case of stringency,
banks could take notes, no matter
how good, and obtain for them cur
renCy when they were themselves
pressed for more currency by their
depositors.
1T is really surprising that we have
not had more currency panics and
more distress from the past lack of
elasticity in our currency. Ours was
The only great country which had q
banking and currency system with no
provision of that character
Germany, Frank and England long
ago recognized the absolute necessity
'ur affording temporary enlargement
pi he currency. The Bank of Ger
many, the Bank of France and the
P7nk Of England each had the power
'a issue paper currency under plans
10 enlarge its volume TO meet an
emergency, and retire it as soon as
hs emergency was over. Under their
systems runs upon banks have been
almost impossible. Any solvent bank
whose depositors concluded that they
wanted their money could 'rke It's
good paper and go to the Bank of
Germany, or the Bank OF France, or
NE Bank OF England and discount
that paper, thereby obtaining all the
currency necessary to meet the call of
depositors across the counter, and
this could be done without delay.
The Bank Of Germany, though its
stock is held by Individuals, is entire
'y controlled by the Government. The
same thing is treu of the Bank OF
France. The Bank of England ex-
cludes from its directorate men en-
gagged IN the business of lending
money, and 1t is controlled by con-
stltutton as fixed as the Constitution
Of the British Empire
Dependent on Willingness.
The right, therefore, to call for an
enlargement Of the currency In each
Of these three countries has been de-
pendent not upon the willingness OF
the banks to respond, but upon the
law of the land.
Our new act provides that the
United States shall be divided into
districts, not less than eight nor more
than twelve. In each of these dis
trlcts there is 70 be designated g. re-