The Washington herald., 1914-03-15
CURRENCY LAW
TO AID FARMERS
VIII Be in Effect Before Next
the Falls Crops Are
Moved.
ELASTICITY OF SYSTEM
Organization Committee to Announce
Regional Reserve Districts Within
Next Few Y. s.
ELASTICITY OF SYSTEM

Before the farmers and ranch owners
In the West move their crops TO market
next fall. the administrstion's new Cur
rency measure will be in full effect An
nouncement to this effect was made by
Secretary OF the Treasury McAdoo and
Secretary Of Agriculture Houston, who
have been engaged in the organization
work incident to the creation OF the new
financial system of the country since
Congress passed the measure two months
ago.
According to Secretary McAdoo. the
new law will provide a currency SUM-
ciently elastic to enable farmers to OBJ
tain all the money they need to move
crops. Heretofore. especially during the
first year OF a new administration. a
money stringency always was evident at
crop-moving periods. The Aldrich-Vree
land bill was passd by Congress just be-
fore the House OF Representatives be-
came Democratic. II authorized the See
retary OF the Treasury to issue currency
to the amount OF S500.O00.00O IL. in his dis-
cretion. II was necessary for the move
ment of crops or for any other emer-
geney. This money never was put into
circulation for the reason that at no
time during the past several years, since
for the United States government to is-
sue additional currency for any particu-
lar purpose. The provision gave the Sec
retsry OF the Treasury power to stop in
cipient panit and also the power to is
sue currency to relieve a stringency in
any artIcular part Of the country.
Big Emergency Fund.
Now that an entirely new currency
k..a axvfGA AnaA Arf faI
experts declare II will be impossible to
tell how IL will work. Secretary McAdoo
has reminded the general public, how
ever. that the S5oo.0Oo.000 Of emergency
money is held at the Treasury Depart
ment and, II necessary. the whole sum
will be turned loose into the money mar
kets to relieve congestion and prevent
an absolute monopoly in staples
The day. according to him, has been
forever passed. when any set OF men
will be able completely to dominate the
finances of the United States. He at
tributes this to the effect that the new
currency system will have upon the coun-
try at large and upon big manipulators
in Wall Street and Chicago particularly.
through the establishment of Federal
reserve system. II is the aim of the law
to prevent congestion of money in New
York City and Chicago. II is hard to see.
according TO some financial experts, how
the accumulation of tremendous re-
serve in New York will be prevented. as
the balance of trade always will be with
the greater city. Southern. Middle West
ern. Western. and Canadian cities gen.
orally clear through New York This
necessitates the holding of large reserves
In New York, and the banks there have
built up tremendous capitals and sur
N nHa hn lat
ment has been started TO bring part OF
this reserve back home" that is, to
keep within the regional reserve district.
large part of the money that now is
kept on deposit in New York banks)
How IL VIII Work.
Under the new system. Mr.. McAdoo
declares. II will be impossible for New
York entirely to deplete the regional re-
serve districts. as the Secretary of the
Treasury is empowered to issue addi-
tionsl currency either ~ giving permis-
sion for banks to increase then holdings
of Federal reserve notes or stock. or by
making deposits Of government securi-
ties In districts that are effected.
Under all circumstances, said Mr.
McAdoo. II do not see how, under the
present currency law. the United States
ever will have another money panic
Even in times of exceptional stress. such
as strikes. etc. the government will be
able to step in and effectually relieve
conditions
Within the next few weeks. the organi-
zation committee of the Federal reserve
system will announce the regional re-
serve districts and shortly thereafter
President Wilson will name the Federal
reserve board. The five or seven men
this board will administer the
new law.