Barton County democrat., 1914-11-20

. 795,600, of which one-Sixth has
been called and is in their vaults.
Washington, Nov. 15.-With
the opening tomorrow of the
twelve federal reserve banks, the
nation will begin actual operation
of its new currency system de-
signed to provide an elastic cir
culating medium based upon mo-
dern ideas of finance and econoln-
les.
1t has taken the reserve bank
organization committee and the
federal reserve board almost 12
months to work out the details of
organization to the point where
an opening date was chosen. Not
withStanding careful deliberations
which preceded every preliminary
step, the twelve banks will not for
many weeks take up and exercise
all the functions bestowed upor
them by congress. Such evolu-
ton as will result from the old ma
tional banking system of neceS-
Sity will in most respects be slow.
The reserve board, the guiding
spirit of the new system, is itself
feeling its way over strange
ground and the men in charge of
The twelve banks probably will
feel. the same desire to work slow
ly and with SureneSS rather than
be. .ventureSOme.
The new system is generally
conceded TO be a compromise be-
tween a central bank and the pre-
sent system with its thousands of
units, scattered reserves and fixed
limits of currency. Its chief at
traction and value, those who in
terpret it find in the elasticity ii
will give to recognized paper cur
rency.
Under the present law the ma
tional bank currency is almost a
fixed quantity based upon nation
al bank capital, issued upon Unit
ed States bonds and unreSponSive
TO the chill of hard times or The
exultatiOn of boom days. It's use
led, the experts says, to unreStrict-
ed loans and speculation, in the
days when money was easy and
to a boarding of resources and
tightening of the purse strings OF
credit when they were hard. II
is said to have bred the panic OF
large credits in reserve and CEN
trail reserve cities. wac helpless
and could get back to their cOun-
ters none of the millions they had
placed with their larger and
stronger correspondents.
Under the new system the feder-
al reserve notes, which in time
probably viii entirely replace the
national bank notes now so ia.
miliar, will be issued upon com.
mercial paper arising out of ae.
tual business transactions. Ii
seems plain that they will rise and
fall in amount as the tides of bust.
ness rise and fall, and that there
will be no plethora of money tC
lie idle. They will be obligations
of the United States government
which national bank notes are
not, and will have back OF them
large reserve of gold in the region
. al banks. Through them the re
serve banks are expected to come
TO the aid of any needy member
bank which has plenty of good pa
per but needs cash. To furthel
insure the flow of money, reServI
banks themselves may be requir
ed to rediScount the diScounteC
paper of other reserve banks.
More than $250,0OO,OO0 of tn,
new notes have been ordered b.
the comptroller Of the currenc.
for the twelve banks. They ar
in $4, $40, $50, $50 and $1OO de
nominations, and are to be ac
cepted by all members banks an,
for all customs taxes or other du
ties. The federal reserve agent 0
every bank in the system, who j
the government Tepfesentaiiy