Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-01-03
CURRENCY LAWS
POWERS AS SEEN
BY A WESTERNER
Scope OF State Banks and
Trust Companies Is En-.
larged, Wade Says.

80 AsID4f7s JAZZ 9---f essIus J. Na4e
/ president Of the Mercantile Trust
Company. Of this city. has just ssaeo
q pamphlet bearing on the new cur
rency law. Il says:
F., The banking and currency law does
not curtail Or restrict. but fnsfsa<
broadens the scope Of powers as1e
I functions Of State banks and tf7,4.
companies vino become members.
II grants % state Organization
substantially all privileges Of the "a
tlonal banking system, except ~
ilsht 10 act as reserve agents 5oss
national banks and the right 10 issue
circulating notes secured by gevar<-
ment bonds
II places State banks and trust cors-
pan1es under governmental stIpersjz-
lon and protection thus affordine Il
and stakeholder.
/ State banks and trust COMPANIES
are permitted 70 discount or redfF-
count bills receivable under sxaal5z
the same terms and conditions a.
! corded national banks.
Sphere L Enlarged
1t enlarges the sphere of state fs.s,x.
and trust companies by permitting the
acceptance by them of the ohIIrafsoE..
Of solvent customers.
me cash reserves under the fsa4s
law will be: County banks. Il mr.
cent. on demand and 3 per cent. ~
time deposits: reserve city banks. X
per cent. on demand and per cert
on time deposits, and central reserv s.
CITY banks is Der cent on derna-A "A
and . per cent. on time deposits,
All checks or drafts depoeifed ~
the credit Of the member banks. sol
/ vent customers can be used the game
/ day by securing a like credit from f!.e..
reserve bank ia their district. a95
further 1t accommodates the depaei
tor IN that he can only be CHARGED
Iegitimate fee approximately cost for
making the collection. This item
alone VIII mean millions Of dollars af'
saving 70 the commerce of the eol.s,-
Try from the operation Of the prese7s
system.
1t provides method By which an
state banks and trust companies MAJ
become part OF a homoeeneo.ss
banking system under the federal .sc =
! eminent
II establishes a reservoir 4res,.|
wnicn currency is obtainablc al ans
I time under the same terms and core
ditions as accorded national banks.
The system will ultimately briisz
more than 10000 national ana S.sfe
banks and trust companies infe>es,i,-
divisions Of not less than eight T,of'
more than twelve centres, all being
under the protection Of the fedora I
reserve Board. thus marsbaling the
reserves OF the nation 10 NEST all
needs Of commerce
BY vote Of to z of tine Fe<isral
Reserve Board the force and power
( OF the entire eight Cor 12l reserv.
banks can, when necessary, be coz
centrated upon any part 0f IT,.
United States needing it's protecxfoz
Bank Nese High Glass
The new law creates q hsvzz
note currency far superior to s1111
bank note issued by any other gov :
eminent, whether it be of Europe
ASIA or Africa. Take for fIiust<zcEos
the values OF security behind II
bank notes of the three greatest Ed
ropean banks viz, London. Paris and Il
Berlin.
Bank OF England Notes: seemr-e:
by gold, but may be paid 70 per cen.
IN gold and % per cent In SILVER. A.
the option Of the governing board.
reserve bank notes of tn BnitzE
states OF America ara secured a.
By the pledge Of the gos~
ment to pay such notes presen
the treasury at Washington
on demand.
BY the obligation OF any
reserve bank TO pay said
gold or lawful money on de-
By the obligation OF eaa
eral reserve bank never TO is
fact It would not be possible
cure them) federal reserve no
less II satisfies the Federal x
Board at Washington, that ii
| At least 40 per cent. of
in its own vaults TO redeem all
/ il issues
In addition to this 40 per
gold reserve, if must have
100 per cent. OF notes SO issu
cured by prime commercial
worth at least 100 per cent for y.
note issued; and this is coupled
the obligation of each member
/ taking out such notes, thar the-a
mercial paper so offered viii be
at maturity.
/ Such notes are secured bv
entire capital stock of each fe
reserve bank, which capital ca
/ be less than 81. 600. 600 for any
bank. In addition there is the
! curtty Of the double liability OF ese
share Of stock owned by each mem
/ Der bank.
/ Not Backed by Gold.
/ More than 20 per cent. of the presau s.
I outstanding Bank of England notes
/ are now secured not by gold, but BIZ
the debt Of the British government.
Bank Of France notes. Are payanis-'
In gold, but the governors of the bank
1 may, at any time, elect to pay all o.
such notes IN silver
/ Bank OF Germany notes (ReAch
/ oank) Are payable in gold but nas
be paid in silver at the option Of tias
/ bank governors.
/ All Of the three banks above named
are private institutions. There As ma
/ government obligation behind them
nor are there pledges by any act Of
/ English Parliament or the Nafiouas
Assembly of France. or of the Reich
/ stag in Germany. which binds these1
! governments TO protect their notes ass'
payment IN gold.
/ The reference TO the currency sys
+ tenn of England, France and CerEans
/ are made simply TO show compare
/ lively. and thus better point out lhs
! soundness Of our basis for reserve
bank notes. 1t is not to be understood
/ that the comparisons Indicate any
misgiying on our part that the notes.
/ of these great countries will not be
4 paid in gold on that there IS not ahso
/ lpte confidence in the security of theI
/ pound sterling. the franc or thetnarl
1 As a member Of the currency com
mission Of the American Bankers AS y
sociaticn Tor more than seven years.
/ l have labored TO bring about amend
ments TO the prosssed banking and
I currency legislation TO the end that
/ State banks and trust Companies
would have recognition IN any nevS.
! system esta blished. [ am quite sure,
/ that this has been accomplishment al
the new bin and that it accords them.
all privileges that could be reasonably
expected
/ regard the bill as safe. practiess