The Dickson County herald. (Dickson, Tenn.) 1907-1979, 1914-01-02
Most Far-R Reaching Measure Re-
latin0 II Financs Enacted
Ia Many Tears.
'alIEET POINTS REVIEWED
Essentials Of Ns~ Law Summarized
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Makes Little Change IN opsr
ssion Of Present Nstlensl
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serve Banks Pro-
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Washington. Dec 23.--The new bin
Affecting the currency. banking and
finances Of the country IL ons OF the
most far-reaching measures relating
TO finance that have 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 It's important
bearings on money. finance. banking
and the entire range OF fiscal subjects.
public and private. which II affects
Summary Of the Bill.
With O view. therefore. OF present.
Ing succincuy and In non-technical
language an spitome OF the salient tsa.
lures OF the measure as finally framed.
the following summary Is given OF the
bill AZ whole and OF Its principal
details:
Generally speaking. the frst steps
to be taken to bring into operation the
nations new financial system will be
through an organization committee
consiating OF the secretary OF the
treasury. secretary OF agriculture and
controller OF the currency.
Banks have 50 days within which to
ale their applications for membership
in the new system. and one years
time Ia allowed before the government
viii compel the dissolution OF any na.
uonal bank tina, refuses 10 join
VIII Take Up the Slack"
The new Law will make little direct
change la the operation OF the pres.
ent national banks, except 70 allow
them 10 loan a certain amount OF their
funds upon farm mortgages
It's chief purpose is TO add new
piece Of machinery 10 the banking
system that viii take up the slack
during the changing business condi-
tons OF each year that viii give the
banks Il place to quickly convert their
assets into cash In time OF need and
that Will bring out new federal eur.
rency whom II IL needed, and retire II
when money becomes cheap"
Banks are now required TO keep a
Eat, k,G~
RESERVES. 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 designat
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
II they are paid out to meet demands
the banks are left in a precarious con
dition
Basic Principle Of Law.
The basic principle OF the new law
Is TO get these reserve funds out into
circulation when necessary without
lessening the safety OF any bank, and
TO provide a place TO which local
banks may rush In crisis and get
cash for the prime commercial IN
pei" they hold In their vaults
This Ia to be accomplished through
chain OF regional reserve banks, or
reservoirs Of reserves. Ia which all
banks shall deposit a stated part Of
the money they are required to hold
as reserves
Under the new system. when
financial furry comes the banks can
take commercial paper, such as notes,
drafts and bills OF exchange, 10 these
reservoirs" and secure the use OF
their own reserves. or II necessary,
even the reserve OF other banks. by
depositiug this security
The new regional banks will re-
ceiye about ene.haK o, the bank re-
serves Of the country They In turn
will ha permitted TO loan back 10 the
banks all but AZ per cent o. these
reserves SO that in ease OF emergency
millions OF cash can BE- brought our
into circulation quickly
The banks will have 10 pay for these
loans. however. as individuals have TO
pay for loan from any local bank
and this charge Is expected 10 prevent
the too free use Of the reserves held
by the regional banks
New Paper Currency.
A new form OF paper currency II
also provided for, 10 come out IN case
Of emergency. and which Ia expected
to 20 back into the hands OF the gov
eminent when times are normal.
These treasury notes" will be printed
BY the goverumen; and issued through
each regional reserve bank. and will
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Should Be Made 20 DfSulse Secret
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