The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1914-01-01

Warrington. Special: The new bill
@ecting the currency. banking ant
fnances of the country which boil
branches OF congress prepared TO pas!
feecore adjournment and today goes be-
Eoro President Wilson for his sigma.
knrA II n of tho most far reachinl
measures relating to finance that has
been enacted In many years. The mag
ndeude OF the subject. the diversity OF
interests affected and the length OF the
debates In both branches Of congress
has made It difficult for h ordinary
observers to follow the changes and
Frasp b 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 1t affects
With q view. therefore. of presenting
-succinctly and In noatechnical language
en- epftome OF the salient features OF
the measure al finally framed. the fol-
lowing summary liz given of the blu as
q whole n OF Its principal details:
Generally speaking. the first steps to
be taken to bring Into operation the
fadon's new financial system will be
through In organization committee
consisting OF the secretary Of the treas
uay, secretary Of agriculture and con-
eroucr of the currency. Banks have
20 days within which to nle their ap-
piicahons for membership in the new
yyBtem. and one years time Is allowed
Before the government will compel the
dissolution of any national bank that
refuses to Join.
The new Law win make little direct
ehange In tho operation of the present
oauonal banks, except to allow them
20 loan q certain mount of their funds
upon farm mortgages. Its chief pur-
pose La to add a new piece OF machin-
cry to the banking system that will
take UP the "slack" during changes of
business each year; that will give the
banks q place to quickly convert their
assets into cash in time OF need, and
that will bring out new federal cur
Tency when 1t lis needed and retire 1T
when money becomes cheap"
Banks are now required to keep a
certain percentage of their deposits as
reserve" part in cash in their own
vaults, and part of which may be re-
deposited In the banks of New York,
Chicago, st Louis and other designated
cities. In times of sudden financial
demands. when banks have loaned up
20 the full limit of their resources.
these reserves furnish little relief, be-
cause II they are paid out to meet de-
M1ands the banks are left In q pre-
rartous condition.
The basic principle OF the new law
Is to get these reserve funds out Into
circulation when necessary without
ieasening the safety OF any bank; and
60 provide q place to which local banks
may rush In q crisis and get cash for
the prime commercial paper they
hold in their vaults.
This is to be accomplished through a
chain OF regional reserve banks or
reservoirs OF reserves" In which all
banks shall deposit a stated part of
tho money they ere required to hold as
reserves. Under the new system,
when 4 financial furry comes the
banks can take commercial paper, such
as notes, drafts and bills Of exhange
TO these reservoirs and secure the
use OF their own reserves, or IL neces-
ssary, even the reserve OF other banks,
by deposidng this security.
The new regional banks Will receive
about one-half OF this bank reserve Of
tho country They, In turn, win be per-
Snitted to loan bach to the banks all
but IS per cent OF these reserves SO
chat Ia case OF emergency, millions OF
cash be brought out into circula-
zion quickly. h banks will have TO
pay for these loans, however. az In
div1duals have to pay for a loan from
my bank, and this charge Is expected
r. prevent the too free use of the rs-
held by the regional banks.
a new form Of paper currency is
provided Tor to cone out in case
50 back n tho hands of the govern
ment when times are orna These
TREASURY notes. will be printed by the
sAgional bank and WILL bear the guar
Il