The citizen. (Frederick City, Md.) 1895-1923, 1914-01-02
ra.Reaching Measure Re-
''.a to Finance Enacted
in Many Years.
IEIT POINTS REVIEWED
,I.ls of New Law Summarized
yontechenicaI Language
,.tes Little Change In Oper-
tim of Present National
Banks-Regional Re-
serve Banks Pro-
vlded For.

4 serve BANKS FTo-
\ vlded For.
4 ..hngton, Dec. 23.-The new bill
N 4ne the currency, banking and
" ,es of the country is one of the
NJ iar.reaching measures relating
~ .,nce that have been enacted in
years.
oS' magnitude of the subject, the
III xIty Of interests affected and the
va q a Of thu debates In both branches
,ali Areas has to follow the changes
ietI rasp the essentials Of this highly
let heal measure in it's important
40 hgs on money, finance, banking
sid the entire range Of fiscal subjects,
10 and private. which 1t affects.
Summary of the Bill.
With a view, therefore, of present
succinctly and in non.technical
ii guage an epitome of the salient fea-
les of the measure as finally framed,
d following summary is given of the
HI as a whole and of its principal
tails:
Generally speaking, the first steps
be taken to bring into operation the
nhon's new financial system will be
through an organization committee
insisting of the secretary of the
sasury, secretary Of agriculture and
pntroler of the currency.
Banks have 60 days within which to
De their applications for membership
i the new system, and one years
lime is allowed before the government
VIII compel the dissolution of any ma
donal bank that refuses to join.
viii take Up the Slack"
The new law will make little direct
.lhange in the operation of the pres
'nt national banks, except to allow
hem to loan certain amount OF their
binds upon farm mortgages.
Its chief purpose is to add a new
piece Of machinery to the banking
EyStem that will take up the slack"
during the changing business condi-
lions OF each year; that will give the
banks place to quickly convert their
Issets into cash in time Of need, and
hat will bring out new federal cur
ency when 1t is needed, and retire 1t
Then money becomes Cheap"
Banks are now required to keep a
ertain percentage Of their deposits as
part in cash In their own
aults and part of which may be re-
lNosited in the banks Of New York,
no. st, Louis and other designat-
times OF sudden financial de-
5, when banks have loaned up to
II limit of their resources, these
res furnish little relief, because
are paid out to meet demands
INKS are left in a precarious con-
Basic Principle of Law.
The basic principle of the new law
Ito get these reserve funds out into
rculation when necessary without
,ssening the safety Of any bank, and
0 provide a place to which local
anks may rush in a crisis and get
ash for the prime commercial pa
er" they hold in their vaults.
This is to be accomplished through
chain of regional reserve banks, or
of reserves" in which all
anks shall deposit a stated part of
be money they are required to hold
reserves.
huder the new system. when 4
! kcial furry comes the banks can
! Monumental paper, such as notes,
and bills of exchange, to these
\ 6rvoirs," and secure the use of
! If own reserves, or, If necessary,
ven the reserve Of other banks, by
epositing this security.
The new regional banks will re-
Give about one-half of the bank re-
ewes of the country. They in turn
ill be permitted to loan back to the
anks all but 35 per cent. of these
eserves, SO that in case of emergency
billions of cash can be brought out
ito circulation quickly.
The banks will have to pay for these
,ans, how ever, as individuals have to
az for a loan from any local bank,
nd this charge is expected to prevent
be too free use of the reserves held
y the regional banks.
New Paper Currency.
A new form of paper currency Is
provided for, to come out in case
emergency, and which is expected
:, back into the hands Of the gov
ment when times are normal.
nese treasury notes" will be printed
y the government and issued through
ach regional reserve bank. and VIII
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