La Junta tribune., 1914-01-24
NEW BANKING LAW
u. Phillips Writes Interestingly ~
the New thanking Law for the
Readers Of the Tribune

an outline and opinion ON the new
currency bin. There has been no ma
ttional legislation enacted for a good
many years. which in the future will
so vitality effect the prosperity of the
country. and for this reason We are
glad to give our readers the following
opinion OF Mr.. Phillips on the new
banking law:
For the first time In fifty years the
United States has new banking
law. The Glass-Owen bill. nov
known as the Federal Reserve Act
which passed the senate December
1s. 1913. and was signed four days
later by President Wilson. has beea
before congress and the nation for
the past nine months. The Law 10 an
experiment. as there Is nothing like
II In any other country OF the world.
| The Wilson administration however.
assumes the entire responsibility for
/ the measure. but the democrats do
admit that some changes may b.
necessary which will be revealed ~ II
Is put into operation. This is an In.
/ stance In which history Is being re-
peated. FOR congress has by the pass
age of the Federal Reserve Act char
tered a United States Bank. thus re-
4 h.s h.x L., nd
again in 1916. The former contin-
ned In business during the life Of
their charter. twenty years. but the
! latter was put out OF business by An
| drew Jackson In 1892. A good
many financial authorities favor
central bank with branches and this
would have given us II the platform
on which Mr.. Wilson Was elected had
not declared against Central
Bank" Instead therefore OF Cen
trail Bank" ". are to have eight to
twelve Federal Reserve Banks to be
centralized under the supervision OF
/ SugUou bCUpbv0 Hb@9ovW u&s1zo9a0 -
the Treasury Building. Washington
The word Federal" is synOnymous
with United States Government -
and therefore We are TO have a Unit
I'd States Bank under n new nam.
The eight or twelve Federal Reserve
Banks have the power to establish
l -. ...lst
unite all together In = very compact
system. Although there In no Cen.
trail Bank" the system being central
ixed under the Federal Reserve Board
sitting In Warrington. yet one Of IN.
eight or twelve Regional Banks will
In reality become the Central Bank
by the Law OF commerce and trade
which the congress Of the United
States cannot change. This will be-
the New York city Federal R-s-rv.
Bank ~ that city II the financial
center of the country. the second
largest money market Of the world.
The capital ON which the system
begins business. exclusive Of United
States deposits and currency issued.
II 10 b~ contributed by the bank oi
the entire nation. the government
and the public also having the right
to subscribe. esch bank taking stock
u the satsat Of six per cent .: i's
capital and surplus. National banks
are compelled to unite or forfeit
their charter aud state banks can
cone In or not as they elect. TIL.
member banks must deposit In IN.
Federal Reserve Bank In who's. dis
trict they are located and hay. th.
right TO cali on them for accomoda-
tions In time Of need. The president
said when signing the bill that 4,
furnishes machinery for free and
elastic and uncontrolled credits.
meaning that Wall Street would no
longer control and In conscaucnc.
credits would be free and elastic.
Of the new law. Time alone san tell
whether this object viii bc accom-
plished. but In one regard all author
tiles agree. They ssy u step has
been taken In the right direction and
the new law. although II may be i'm
perfect. In nh Improvement ON the
old.
need not refer To the Advisory
Board nor define the powers and du-
ties Of the boards Of directors Of the
Federal Reserve Banks. Suffice to
ray thst the supreme power and con
troll II vested in the Federal K-scrv.
board of nevea members. two Of
them are the secretary Of the Treas
ury aud com ptroiles Of the currency.
The other five are also appointed by