Five Mile Beach weekly journal., 1914-01-02
THE new CURRENCY LAW
BY S. p Foster, President Of the
First National Bank, Of Eli
mer. N. }.

~ - >
First National Bank, Of Ell
mer, N. J..
in the Elmer Times.
The final passage of the new curren-
cy law is hailed with satisfaction, even
by those who see in it many points TO
object to. It relieves a long period OF
uncertainty and brings about a time
when as the law of the land, it should
be heartily supported and every effort
made to make of 1t q success. The
hundreds Of changes made since the bill
passed the House, has greatly improv-
ed 1t. Many of the original provisions
were crude aud unavoidable, impracti-
cal and undesirable, but the conserva-
tive Senate refused to approve it until
every point had been threshed out, and
the House finally yielded to most Of
the changes proposed by the Senate.
The title OF the law gives the kernel
of Its intention, viz:
"An act to provide for the establish
ment of Federal Reserve Banks, to fur
nish an elastic currency, to afford means
Of rediscounting commercial paper, to
establish q more effective III supervision
OF banking 10 the United States, and
for other purposes"
After the House passed the bill In
its original form, the smaller banks of
the country became especially alarmed
yer Section ~, which proposed a
change so radical in the handling of int
crest or savings accounts, that they
brought tremendous pressure to bear at
Washington and were able to show the
Senate committee that the proposition
would be bad for both banks and depos-
itors. The section was dropped by all
factions and thus a great step was taken
to better the proposed law.
The average person in the middle and
eastern states will see very little change
in their banking relations made by the
operation Of the law, although 1t causes
the banks entering the system to make
many changes in procedure, changes
which must be given a trial before 1t
car be decided certainly whether or not
they are beneficial.
The law does not make any changes
in the attitude of banks toward their
depositors and borrowers. We do not
see q single provision in 1t which will
make 1t any easier to borrow money in
normal times, so far as the average man
is concerned, than formerly. He must
give lust as much security as heretofore.
Credit Is based on points not covered
by statute law. 1t is individual.
1t Is hoped that the law will head of
and prevent panics by making 1t poss-
ible to provide IN increase of currency
in times OF strlngency, or when people
become scared and hide their money,
taking it from the channels of circula-
tion. 1t permits banks to re-discount
-papeEn<Rkktha~asw Federal Reserve
banks. Notes e. discounted must, how
ever be guaranteed by Endorsement by
- DNHA 5CrhAh6 iC-NioSOunt5t III idCb
the restrictions thrown around the
Federal Reserve Banks are such that
only gilt edge paper will be accepted, in
fact, small borro wers with limited
mean will not find in the new curren-
cy law a single point to enable them TO
obtain more or easier credit than here
tofore.
1u many sections Of the South aud
west, interest rates range from s per
cent. to 10 per cent. That is the rate
paid, and 10 some sections as high as
IL per cent. These rates appear to be
Cumbersome and doubtless are, but thus
far In the history Of sections undergo
ing a period of development, capital
can only be attracted by the prospect
of high return. The new currency law
1t is hoped, will result in q more even
distribution of money over the country
and thus perhaps enable those who
have been forced to pay high rates, to
obtain loans at lower rates. We are