The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-10-15
Gil ASS REPLIES
TOCRITIC|SMS
OF new BANK LAW
Patron of Measure in Con-
gress Analyses Provision
of Reserve Act.
DOES NOT PROVIDE
FOR ARBITRARY POWER
Answers President Reynolds's
Criticism as to Deposit of
Government Funds.
OPPOSES COTToN-BUYING PLAN
Hamlin Warns Against Use of Rene
dies, Which May Prove Worse
Than Disease.
DOES NOT PROVIDE
FOR ARBITRARY POWER
OPPOSES co1ToN-BuY1NG PLAN
Hamlin Warns Against Use OF Rene
dies, Which May Prove Worse
Than Disease.

dies, Which May Prove Worse
Than Disease.
Defending the Federal reserve act
against the charges brought against It
Glass. addressing the American Bank
ers' Association yesterday afternoon at
the Jefferson Hotel. replied sharply to
the criticism of the law made by Presi-
dent Arthur Reynolds In his annual ad-
dress to the convention ut the morning
session.
Air. Reynolds had criticized the pro-
vision OF the act. which, he said. left 1t
to the. discretion OF the Secretary OF
the Treasury to deposit government
funds in the reserve banks and desig-
nate them as government fiscal agents.
or not, Just as he chose.
1T Is just criticism of the measure"
President Reynolds said. that 1t does
not take the government out Of the
banking business, and that it confers
upon one of our government officials an
extraordinary power and discretion un-
warranted by the spirit OF our institu-
ton and rcpugnant to republican prin-
ciples."
TELLS OF MOTIVES WHICH GUIDE
FRAMERS OF RESERVE ACT
Mr.. Glass. who followed Governor
Charles S. Hamlin, OF the Federal Re-
serve Board. OIL the afternoon program.
spoke dispassionateSy for an hour, set
ting forth 4 few sideliYhts." as he
3 put II. on the motives and aims which
guided the framers OF the reserve act
In the drafting of that measure He
took up one by one the criticisms that
had been made against the act. TO show
that they were founded on nisunder-
standing and without ground.
The act has been attacked" said
Congressman Glass. because IT in
ff.h ,.-ft
much power Ii was objected that the
board is given the right TO force one
reserve bank to discount tho paper OF
another. Again II liz objected that
there is no provision In the law to COM
pei the government To deposit public
moneys in the. reserve banks. and that
whethcrStiIis Is done Hor mot is left to
the discretion OF the Secretary OF the
Treasury.
N0I'OwER NOT HERETOFORE
IN HANDS OF ONE MAN
II state to this body fatty, and invite
contradiction and discussion, that the
Federal reserve act confers upon the
reserve board no power which IL not
under the present system exercised In
greater measure by single govern
ment official The control OF the re-
serve board over the member banks OF
the system Is not greater than the con-
troll the Comptroller of the Currency
has exercised over the national banks
lOr more tNan MY years.
The discretion given to the Secre-
: tary OF the Treasury by the reserve
act. In the matter OF depositing govern
ment money and appointing the reserve
banks fiscal agent OF the government
your president says. is repugnant to re-
publican principles. 1t is n wonder
that il hasn't been found out before
this.
NO COMPLAINT MADE WHEN
MONEY WAS LOANED IN NEW YORK
when the Secretary of the Treasury
OF the United States. exercising the
same power in 1907. deposited $4,000
600 in government gold with New York
banks to save a critical situation. not
chirp WAS heard about a proceed
ing repugnant to republican princi-
PIES"
MIR. Glass spoke heatedly. glaring
at the assembled bankers with an un-
spoken invitation to combat. The only
burst of applause. The speaker re-
turned Immediately to a more amiable
vein, and In his concluding defense of
the reserve act repeatedly won the ap-
plausc of the audience.
Congressman Glass examined in some
detail the charge that the reserve act
provided system which would place
premium upon imitation. that 1t tore
down the structure of exchange, that
it withheld from the banking interests
on the Federal Reserve Board and that
it provided for. immense. issues of fiat
money.
NO FOUNDATION FOR
FIAT MONEY CHARGE
The fat money charge, he said, was
idle. Under the provisions OF the re-
serve act, he pointed out. note issues
are required to be ::ecured by a 40
per cent gold reserve and by n 100
per cent secondary reserve. Behind
this he said, is the obligation of the
individual member banks, the RESPONSE
bility of the board OF directors OF the
reserve bank as we'll as the super
vision OF the Federal Reserve Board IT.
self. In addition to these guarantees
lie said, there was the personal guar
antee of 90,000,000 free American citi-
zens-a surety sounder than govern
ment bonds Itself No lexicographer
In the world he said, would support
shch a definition of fiat money. .
i Mr.. Glass held the reserve acts pro-
visions with regard to exchanges to be
free from criticism. This part of the
act, he said. was of his own making,
and he was proud of 1T. No bark. he
said, has the right to erect toll-gates
on the highways Of progress. The SEN
timent was loudly applauded.
/. SUFFICIENT SAFEGUARDS
IN WAY Of RESERVES
Sufficient safeguard in the way OF
reserve requirements, thought Mr.. Glass
s sfproyided by the reserve act to dissl-
pate any fear that the system will en-
courage dangerous imitation, It was
the purpose of the act, he said, to me lie
possible an elastic expansion, and this
3 it did. If 1T didn't do that 1t had no
particular reason for being, since, he
said, 1T was designed primarily to pro-
vide more elastic currency and to Of
feet decentralization OF the nations
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