Evening star., 1914-08-08
The new BANKING LAW.
V.-Summary Of the Act.
By Frederic J. Haskin.

(Note-The financial crisis precipita tated
by the European war has caused the
government to hasten the organization
of the banking system under the new
federal reserve act. For that reason the
present series Of the Haskin letters will
be found to be most timely. These let
ters explain in detail the fundamental
facts about the new system that is being
established in such unusual circum-
stances)
The federal reserve act is the cap
stone to the country's banking system.
Existing laws have been preserved al
most intact Such changes in the ma
tional banking fabric as have been pro-
vided for in the act are to be brought
about gradually. but, in the main, busi-
ness will be carried on just the same un-
der the new law as formerly.
In its preamble, the new legislation is
defined as IAN act to provide for the
establishment Of federal reserve banks,
to furnish an elastic currency, to AFFORD
means Of rediscounting commercial
paper, to establish a more effective su-
pervision of banking in the United States
and for other purposes
The so-called Owen-Glass bill received
most thorough consideration. For the
four years preceding its formulation the
subject of banking reform was con-
tinually in the mouths of the people. All
manner of proposals were being made
and considered. The national monetary
commission had thoroughly canvassed
the banking situation. and practice OF
the world, and had made a report ITO TO
Congress filing forty volumes. The
leading financial editors, bankers pusl-
ness men, university professors and gov
ernment officials in Europe, America and
the orient contributed toward making
this report one of the richest ever as
sembled upon world banking.
i
This report and the resulting Aldrich
ness circles and
Basis Of the by the public gen
Glass Owen Bill. tb,s fund Of IN.
formation the Glass-Owen bill was draft
ed. In January and February, 1919,
hearings were held on the subject. and
the testimony given took up 745 printed
pages. June 26, 1913, the bill was intro
duced into the House by Representative
Glass of Virginia 1t remained in the
House committee on banking and cur
rency unOl september y, Wnen IL was re-
ported to the House and passed Sep
tember II.
Anticipating the passage of the BILL
the Senate committee on banking and
currency began hearings on the proposed
law September 2. These hearings were
continued until November 6. and the
country's leading bankers and business
men were heard upon the subject. The
testimony taken filled $3.50 printed pages
For the further information of the legis-
1ators there was the copious testimony
taken by the Pujo committee in it's in
vestigation of the alleged money trust"
The bill was brought to the Senate and
remained under consideration by the SEN
ate committee on banking and currency
for some time. The committee finally re-
turned to the Senate the House bill and
two Others one of which was reported by
the democratic senators, and the other
by the republican members of the com
mittee, Joined by one democrat. The bill
was modified by the Senate and later
by the conference committee, but, as
passed, 1t bears closer resemblance to the
Owen draft than to any of the others.