The Washburn leader. [volume] (Washburn, McLean County, N.D.) 1890-1986, 1914-01-02
HOUSE ACCEPTS REPORT
ON CURRENCY MEASURE

ON CURRENCY MEASURE
Washington, Dec. 22.-The new
bill affecting the currency. bank.
ing and finances Of the country
which has now been passed by
both branches Of congress and
signed by President Wilson, is
one Of the most far-reaching mea
ures, relating to finance that has
been enacted in many years.
! The magnitude Of the subject,
the diversity Of the interests af-
fected, and the length Of the de-
bates in both branches Of con-
gress, has made it difficult for
the ordinary observer to follow
the changes and grasp the es-
sentials OF this highly technical
measure in it's important bear
ings on money, finance, bank
ing and the entire range Of fis-
cal subjects, public and private,
which it affects. With view,
therefore, of presenting succinct-
ty and in non-technical language,
an epitome Of the salient features
Of the measure as finally framed
the following summary is given Of
the bill as whole and Of it's
principal details.
Generally speaking, the first
steps to be taken to bring into
operation the nations new final
organization committee Of three
members to be named soon by
President Wilson. Banks have
go days within which to file their
applications for membership in
the new System; and one Years
time is allowed before the govern
ment will compel the dissolution
Of any national bank that refuses
to join.
The new law will make little
direct change in the operation Of
the present national banks, ex-
! cept to allow them to loan GER
tain amount Of their funds upon
farm mortgages. It's chief pur-
pose is to add a new piece Of
machinery to the banking sys-
TEN that will take up the slack
during the changing business. con
ditions of each year; that will
give the banks a place to quick
ly convert their assets into cash
in time Of need, and that will
bring out new federal currency
when it is needed, and retire it
when money becomes Cheap"
Banks are now required to keep
a certain PERCENTAGE Of their de-
posits as reserves" part in
cash in their own vaults and
part of which may be redeposit- |
ed in the banks Of New York,
Chicago, St. Louis and other
designated cities. In times of
sudden financial demands, when
banks have loaned up to the
full limit Of their resources, these
reserve furnish little relief, be-
cause if they are paid out to
meet demands, the banks are left
in a precarious condition.
The basic principle Of the new i
law is to get these reserve funds
lizing influence today in our rur-
out into circulation when nec-
essary, without lessening the !
safety of any bank; and to pro- !,
vide a place to which local banks
may rush in a crisis and get cash
for the "prime commercial pap
err they held in their vaults.
This to be accomplished through
q chain Of regional reserve banks
Or reservoirs of reserves, = in
which all banks shall deposit I
stated part Of the money they {
are required to hold as reserves.
Under. the new system when
ever a financial furry comes, the
bank can take commercial paper, L
such as notes, drafts and bills Of I
exchange, to those reservoirs
and secure the use Of their own
reserves, or if necessary even the
reserve Of other banks, by deposit
ing this security.
The new regional banks will 7
receive about one half OF the L
bank reserves Of the country. !,
They, in turn, will be permitted i
10 loan back to the banks all but
IS per cent Of these reserves 30
that in case Of emergency, mil
ions Of cash can be brought ont
INTO circulation quickly. The /
banks viii have TO pay for = loan
from any local hank; and this
,harge . expected to prevent
Ne too ne of the resssvssl