Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-19

not issue It, and no provision exist
ed by which the Government could
issue additional currency except UNI
der the Vreeland- Aldrich act OF 1908,
which was almost <rohibtive.
Compelled to Control.
When money became scarce in
locality, the depositors in the banks
would he needing their funds and,
therefore, Withdrawing their deposits.
The banks relying on deposits 10
make loans instead of being able to
relieve stringency by increasing loans
when good notes were offered, were
compelled to contract loans to meet
demands Of their depositors.
The banks which should have been
able to relieve the stringenCy did busi-
ness under a system which compelled
them to Increase the stringenCy.
The present law will take the re-
serve out of the central reserve cities
and keep them in regional banks or in
tn vaults of the member banks where
they will be free from the specula-
tive use now made OF them and where
they can easily be placed at the point
most in need OF their use and where
they will furnish an Increased ser
vice and security to depositors in the
banks for whose benefit they are
maintained. The law also furnishes
a means for the ready movement of
currency from one section Of the
country where II may not be in de
mand to another where II is special
~ needed. 1t will also give elastic
ity To the currency through the is
sue and retirement of Federal re-
serve notes.
Lack of Elasticity Worst I
The greatest dnfprt nltr roCe At
currency system was its want Of elias
ITCHY the utter lack of any provi-
sion by which, in case OF stringencs
banks could take notes, no matter
how good, and obtain for them cur
rency when they were themselves
pressed for more currency by their
depositors.
1T is really surprising that we have
not had more currency panics and
more distress from the past lack Of
elasticity in our currency. Ours was
the only great country which had a
banking and currency system with no
provision of that character
Germany, Frank and England long
ago recognized the absolute necessity
for affording temporary enlargement
Of the currency. The Bank OF Ger
many. the Bank OF France and the
Bank of England each had the power
10 issue paper currency under plans
70 enlarge it's volume to meet an
emergency, and retire IL as soon as
the emergency was over. Under their
systems, runs upon banks have been
almost impossible. Any solvent bank
whose depositors concluded that they
wanted their money could IKE It's
good paper and go TO the Bank OF
Germany, or the Bank OF France, or
the Bank Of England and discount
that paper, thereby obtaining all the
currency necessary to meet the call ~
depositors across the counter and
this could he done without delay
The Bank Of Germany. though its
stock is held by Individuals, is entire
ly controlled by the Government. The
same thing Is treu of the Bank %
France. The Bank of England eN
cludes from its directorate men en-
gagged In the business OF lending
money. and II Is controlled by a con-
stitution ss fixed as the Constitution
of the British Empire,
Dependent on Willingness.
The right, therefore, to call for an
enlargement OF the currency I'm each
of these three countries has been de-
pendent not upon the Willingness o.
the banks to respond, but upon the
Law Of the land.
Our new act provides that the
United States shall be divided into
districts. not less than eight nor more
than twelve. In each OF these dis
triCts there is 20 be designated a re-