The Forrest City times. [volume] (Forrest City, Ark.) 1871-1919, 1914-01-02
MAKES CHANGES IN
CURRENCY SYSTEM
New Money Law Displaces 122-
Year-0Id Code.
IS FAR REACHING IN SCOPE
Most important Law Relating to FL
nance Passed In Many Years-Es-
sentlaI Features of the Meas
ure Explained In Nontech-
ncal Language.

Washington, Dec. 23.-The new bill
affecting the currency, banking. and
finances of the country is one 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 its important
bearings on money, finance, banking
and the entire range of fiscal subjects
public and private, which it affects.
Summary of the Bill.
With a view, therefore, of present
ing succinctly and in non-technical
language an epitome OF the salient fea-
lures of the measure as finally framed,
the following summary is given of the
bill as whole and of its principal de-
tails:
Generally speaking. the first steps
to be taken to bring into operation the
nations new financial system will be
through an organization committee
consisting of the secretary of the
treasury, secretary of agriculture and
controller OF the currency.
Bank have so days within which to
Ole their applications for membership
in the new system, and one years
time is allowed before the government
will compel the dissolution of any ma
tional bank that refuses to join.
viii Take Up the Slack"
The new law will make little direct
change In the operation of the pres
ent national banks, except to allow
them to loan certain amount of their
funds upon farm mortgages.
Its chief purpose is to add q new
piece of machinery to the banking
system that will take up the slack
during the changing business condi-
tons of each year that will give the
banks a place to quickly convert their
assets into cash in time of need. and
that will bring out new federal cur
rency when it is needed and retire it
when money becomes cheap
Banks are now required to keep
certain percentage of their deposits as
reserves" part in cash In their own
vaults and part of which may be re
deposited in the bi.lks 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
- l H..
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
70 provide a place to which local
banks may rush in a crisis and get
cash for the prime commercial pa
per" they hold in their vaults.
This is to be accomplished through
o chain OF regional reserve banks, or
reservoirs of reserves" IN which all
banks shall deposit a stated part of
the money they are required to hold
as reserves
Under the new system. when a
financial furry comes the banks can
~he commercial paper, such as notes
orSl'S ana Dl'ls Oh exchange TO these
ieseiFo''s' anu secure 'he use OF
eheiI own reserves or necessary,
sven me reserve OF o'her BANKS ol
1eposl''ns inns securl'y'
ne ne" regional o""hS WIZ re
oolFe ABOUT one'hali OF me baAK re
YES u 'ue country. lney ID turn
WI oe rei il'''e al " 'oan "acR 10 the
panNs All oul 90 per cent OF these
reserves so 'hal IN case OF emergency
hiilonS OF Cash can De brought out
Ato 0iioui7''oH quIchIE'
Inc BANKS Will nave 10 pay for these
ioahs, however as individuals nave to
pay LOT loan nom any local bank,
anu tn'S charge Is expected to prevent