The citizen., 1914-01-02
|PRENCY BILL
BECOMES A LAW
|,,,t Far-Reaching Measure Re-
\, y,tinu to Finance Enacted
in Many Years.
'lLIENT POINTS REVIEWED
..,,Ials of New Law Summarized
!, Nontechenical Language
asxes Little Change In Oper-
alton Of Present National
eanks-Regional Re-
serve Banks Pro-
vlded For.

Banks-Regional Re-
serve Banks Pro-
NJ vlded For.
r.shington, Dec. 23.-The new bill
,,tIug the currency, banking and
s,nees Of the country is one of the
ost far-reaching measures relating
: auance that have been enacted in
i hoy years.
D me- magnitude of the subject, the
brsity Of interests affected and the
n ia of the debates In both branches
I crk kress has to follow the changes
gasp the essentials Of this highly
Ct hnlcal measure in its important
, brings on money, finance, banking
leA the entire range of fiscal subjects,
bic and private. which 1t affects.
Summary of the Bill.
with a view, therefore, of present
hg succinctly and in non-technical
!; language an epitome of the salient fea-
nres of the measure as finally framed,
he following summary is given of the
Bill as a whole and of it's principal
details:
Generally speaking. the first steps
10 be taken to bring into operation the
nations new financial system will be
through an organization committee
consisting Of the secretary of the
heasury, secretary Of agriculture and
controller of the CURRENCY.
Banks have 60 days within which to
fle their applications for membership
In the new system, and one years
time is allowed before the government
{ will compel the dissolution of any ma
i tonal bank that refuses to join.
VIII Take Up the Slack"
The new law will make little direct
change in the operation Of the pres
Tent national banks, except to allow
Them to loan certain amount of their
funds upon farm mortgages.
It's chief purpose is to add a new
piece Of machinery to the banking
|system that will take up the slack"
during the changing business condi-
tions Of each year; that will give the
banks place to quickly convert their
assets into cash in time of need, and
that will bring out new federal cur
kency when it is needed, and retire it
when money becomes Cheap"
Banks are now required to keep a
certain percentage of their deposits as
reserves" part in cash in their own
gaults and part of which may be re-
nosited in the banks of New York.
70. St Louis and other designat-
times Of sudden financial de-
S, when banks have loaned up to
p III limit of their resources, these
y res furnish little relief, because
are paid out to meet demands
nks are left in precarious con-
Basic Principle of Law
The basic principle of the new law
to get these reserve funds out into
rculation when necessary without
Ssening the safety of any bank, and
to provide a place to which local
banks may rush in crisis and get
cash for the prime commercial pa
per" they hold in their vaults.
This is to be accomplished through |
. 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
Z reserves.
dder the new system. when
,cial furry comes the banks can |
commercial paper, such as notes,
and bills of exchange, to these
,rvoirs," and secure the use Of |
.sr own reserves, or, If necessary,
ven the reserve of other banks, by
iepositing this security.
The new regional banks will re-
eeive about one-half of the bank re-
serves Of the country. They in turn
pill be permitted to loan back to the
anks all but 35 per cent. of these
kserves, SO that in case of emergency
Millions of cash can be brought out |
INTO circulation quickly
The banks will have to pay for these
oans, however, as individuals have to
pay for loan from any local bank.
and this charge is expected to prevent
The too free use of the reserves held
oy the regional banks.
New Paper Currency.
A new form of paper currency Is |
also provided for, to come out in case
of emergency, and which is expected |
% go back into the hands Of the gov
eminent when times are normal. |
These treasury notes" will be printed
BY the government and issued through |
each regional reserve bank, and will