Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1914-12-09

convention of 1896. explaining j,
passing provisions of the Wake
bill the Fowler q Asset e Carrency bil
and the Nreeland Aldireh cnrrenc.
bills The latter he said was. a com
.bination that was denounced in tn
senate by Aldirch and in the hous'
by Nreeland as vicious and impracti
cable but yet was fostered in th'
country as a remedy for our cur
lency troubles. Those who made {
study Of the bill predicted that not {
dollar of currency would be issued
under the provisions of the bill ant
they were justified by the fact thar
IN the six years that elapsed not 9
dollar was issued until the present
administrator modified its provisions
anG in connection with the Fedora
Reserve Act made it practical.
He said that the two former de.
fects of our currency were Inellsti-
city and rigidity. If in Alexandria the
bar king capital was $2,0O0,00O the
entire ability of the National banks
here to respond to the requirements
of the community were limited t.
that sum although ten times tha'
amount might be needed. The new
system provided an elastic currency
one that would respond to the need'
O. the country and was based, not on
the national debt as formerly but OF
the short time commercial paper o:
American business men which he de
clared was the best security in the
world.
An explanation of bank reserve.
followed. Mr.. Glass said that uned1
The former requirements Nationa
canks were compelled to have re
serve of Is per cent of their de
rosits. Nine percent of this could b
kept in reserve city and so per cen
Of the latter could be spent by tn
oal.k in the reserve city or one in
central reserve city and the resul
IF this pyramiding of reserves was
that the country banks had less tina!
1--WE per cent in reserve and the bank:
in reserve cities only seven per cent
IN slack times, when money would
accumulate in country banks it wouio
be driven to central reserve cite:
where it would draw two percent in
Ierest. In the final analysis all the
,noney in the country was .beiEs
slowly driven into a few great banks
of the country and in turn loaned
New York on call for stock specuia
ton purposes instead Of being USED
for legitimates business throughout
the country.
For years said Mr.. Glass, there
has been a feeling that the country:
finances depended on New YORK
whereas New York was depending
upon the country. At periods OF h'
wear when crops were: moving. the
country banks, would draw on their
funds in New York who in tur1
would draw on their cali loans and a:
a result interest rates would rise
reaching as they:have the figure o;
l3O per cent.
Then followed periods of financial
depression and panics came banks
failed and the wheels of industry
\
Mr.. Glass gave an interesting ac-
count of tho first interview which ne
had with President Wilson on the
subject and said that from that time
on until he signed the bill the pres-'
ident's interest never ceased and his
active aid was always behind the
forces that were carrying the bill
forward,
He explained in detail the provis-
ions of the act and the formation OF
the twelve regional banks, whose
capital is subscribed by the National
banks throughout the country. they
taking an amount. of stock equal to
six. per cent of their capital and
surplus: State banks he said, were
also permitted to subscribe. From
the earnings six per cent were to go
back to the subscribing banks and
then a reserve fund of 40 per cent
is to be built up. After that the
excess earnings are to go into the
United States Treasury to build up
gold reserve which will eventually
stand dollar for dollar behind the
ss4S,oOO,O0O currency notes and
greenbacks in eXistance W.
The principal object of the region
al banks was the rediscount Of COM