Oxford eagle., 1914-01-01
CURRENCY BILL
BECOMES A Law
Most Far-Reaching Measure Re-
lating to Finance Enacted
in Many Years.
SALIENT POINTS REVIEWED

Wakes little Change In opsN
ssion of Present Nstieaai
Bsnks-Hssieesi Re
- serve Banks prs-
= sided For.
Washington. Dee .5-TAe new bin
Affecting thes currency. banking and
finances Of the country is one OF the
most farreaching measures relseing
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 10 follow the changes
and grasp the essentials Of this hi9hly
technical measure In its important
bearings on money. finance. banking
and the entire range Of nscai subjects.
public and private. which II Affects.
summary Ct the DiIi-
With a view. therefore. Of present
ing succinctly and In non-technicaI
language an epitone OF the salient fea-
lures OF the measure as finally framed.
the following summary Is given cf ths
bill a. a whole and Of its principal
details.
Generally speaking. the nrst steps
% be taken to bring into operation the
nations new financial system viii Be
through an organization COMMITTEES
consisting Of the secretary OF the
treasury. secretary OF agriculture and
controller Of the currency.
Banks have 50 days within which TO
nle their applications for membership
IN the new system. and one years.
ume is allowed before the government
viii compel the dissolution of any m
tfonal bank that refuses to Join
Wiri Take Up the Slack
The new Law viii 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 upon farm mortgages.
It's chief purpose rs to ade . rev
piece of machinery 70 the BANKING
system that wiIl -tzke mp the slack
during tho cAanaing business eun1k-
tons Of each year: that VIII givs ths
hanhD . pszcs 10 quickly ccnvsEf t1geP
assets Into c.sh In time of nssd. and
that VII bring cut new federal cur-
rency when II Is needed. and retire Il
when money becomes cheap
Banks are now required to kesp q
certain percentage OF their depossss A.
Reserves part IN cash in their own
vazits and part OF which may be re-
deposited IN the banks Of New York.
Chicago. ST Louis and other designat-
ed eltiss-
u times OF sudden financial de-
ma f.. when banks have loaned up to
the full limit OF their resources. these
reEs-ves furnish little relief. because
n trey are paid ont TO meet demands
the banks are left in a precarious con-
cition-
Basic Principle Of Lava
The basic principle Of the new law
is TO get these reserve funds out into
circulation When necessary without
les-ening the Safety of any hank. and
% provide a place to which local
baEks may rush in a crisis and get
cash for the prime commercial pa
Per they hold in their vaults
This l. to be accomplished through
. chain Of regional reserve banks. or
-rservoirs of reserves In which all
banks shall deposit q stated part Of
the money they are required to hold
as reserves
Cndsr the new system when a
financial furry comes the banks can
take commercial paper. such N notes.
drafts and bills OF exchange, to these
-rcservoirs.- and secure the use OF
their own reserves. or. II necessary.
even the reserve Of other banks, by
depcsiting this security.
The new regional banks viii re
cclve about one-half OF the bank re-
serves OF the country. They In turn
viii be permitted to loan back TO the
hanks all but IS per cent OF these
reserves. 50 that in case Of emergency
millions Of cash can be brought cut
into circulation quickly.
The banks viii have to pay for these
psy for a loan from any local hank.
and this charge Is expected to prevent
the too free use Of the reserves held
BY the regional banks.
Nss Papsr currssey.
A new form Of paper currency II
also provided for. 10 come out IN ease
Of emergency. and which h sxpected
to go back into the hands Of the gov
ernmsnt when times are normal
These treasury notes" viii be printed
BY the government and issued through
each regiona, reserve bank. and VIII