Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1914-01-02

Washington, Dec. 23.-The new bill
affecting the currency. banking and
finances of the country is one Of the
most far-reaching measures relating
to finance that nave been enacted in
many years.
The magnitude of the subject, the
diversity Of interests affected and the
length of the debates In both branches
of congress has to follow the changes
and grasp the essentials Of this highly
technical measure in its important
bearings Oh money, finance, banking
and the entire range of fiscal subjects,
public and private. which it affects.
Summary Of the Bill.
With a view, therefore, of present
ing succinctly and in non-technica1
language an epitOme of the salient fea-
lures Of the measure as finally framed,
the following summary is given Of the
bill as a whole and of it's principal
details:
Generally speaking, the first steps
to be taken to bring into operation the
nations new financial system will be
through an organization committee
COlSlSIl4l5 VI Tic sec tldlN VI lIo
treasury, secretary of agriculture and
controller of the currency.
Banks have so days within which to
file their applications for membership
in the new system, and one years
time is allowed before the government
will compel the dissolution Of any ma
tional bank that refuses to Join.
Will "Take Up the Slack"
The new law will make little direct
change in the operation Of the pres
ent national banks, except to allow
them to loan a certain amount of their
funds pom farm mortgages.
It's chief purpose is to add a new
piece of machinery to the banking
system that will take up the slack
during the changing business cOndi-
tons of each year; that will give the
banks a place to quickly convert their
assets into cash in time of need, and
that will bring out new federal cur
rency when it is needed, and retire it
when money becomes "cheap.'
Banks are now required to keep a
certain percentage of their deposits as
Preserves" part in cash in their own
vaults and part of which may be re-
deposited in the banks of New York,
Chicago. st. Louis and other d~esignat-
ed cities.
In times of sudden financial de-
mands, when banks have loaned up to
the full limit of their resources, these
reserves furnish little relief, because
IF they are paid out to meet demands
the banks are left in a precarious con-
dition.
Basic Principle of Law.
h basic principle of the new law
is to get these reserve funds out into
circulation when necessary without
le~ssening the safety Of any bank, and
to provide a place to which local
banks may rush in a crisis and get
cash for the prime commercial pa
per" they hold in their vaults.
This is to be accomplished through
a chain of regional reserve banks, Or
reservoirs of reserves" in which all
banks shall deposit a stated part of
the money they are required to hold
as reserves.
Under the new system. when q
financial furry m the banks "a
take commercial paper, such as notes,
drafts and bills of exchange, to these
reservoirs" and secure, the use OF
their own reserves, or, if necessary,
even the reserve of other banks, by
depositing this security.
The new regional banks will re-
ceive about one-half Of the bank re-
serves of the country. They in turn
will be permitted to loan back to the
banks all but 35 per cent. of these
reserves. so that in case of emergency
millions of cash can be brought out
into circulation quickly.
The banks will nave to pay for these
loans, however, as individuals have TO
pay for a lOan from any local bank,
and this charge is expected to prevent
the too free use of the reserves held
by the regional banks.
New Paper Currency.
A new form Of paper currency Is
also provided for, to come out in case
of and which is expected
to go back into the bands of the gov
eminent when times are normal.
These treasury notes" will be printed
by the government and issued through
each regional reserve bank, and will