Durant weekly news. (Durant, Choctaw Nation, Indian Territory [Okla.]) 190?-1944, 1914-01-02
WHAT CURRENCY BILL
MEANS TO PEOPLE.
Expected TO Keep COuntry's Credit IN
Shape TO Avoid DepIetlOns.

The whole country Is interested now
in banking. The national congress has
presented to the country an entirely
new law for control of the currency Of
the country, and the administration at
Washington is very happy over the
achievement. The new banking and
currency law will make some changes
in the banking business. It will take
away from the money merchants Of
Wall street-that street is the ogre OF
the man wbr makes war against the
money devil-some of the financial
strength that has led the people Of the
rest of the 5country to anathematize
that small part of the metropolis. The
people of the whole country. who are
now interested in the currency and
banking business, however, are not az
all fixed in their opinions as TO what
has happened or what will happen
with the organization of the reserve
banks that have been provided for by
the new law which the President used
four gold pens in signing so that many
several persons might have souvenirs
of the event.
The average sovereign citizen knows
what bank is. He understands that
it is a place where people deposit their
money. But further than this there
IS more or less hesitation in the an
swer. As a matter OF fact, a CONNER
cial bank, as distinguished from saw
ings bank, is really sort OF a store.
It's line of merchandise is what bank
ers call credit. The credit is an ac-
count at the bank which the man buy
ing it can draw checks against. When
a business man goes to bank to bor-
row $1,000 for sixty days what he
really does is to buy the banks credit
for that sum for two months, paying
for it price which is equivalent to
interest at, say 6 per cent for that
time, or $40. The average citizen
thinks that bank can loan $1,000
only when people have deposited that
amount of money in the bank. This
has been shown by experience to be
wide of the fact. There is really lit
tie demand for currency from a bank
That which is drawn out usually finds
its way back very promptly Usually
the checks drawn against a bank 1ust
about equal those deposited with II
II follows that bank may ordinarily
meet the demands made upon 1t with
small cash reserve. National banks
in the larger cities have to maintain
reserve of 25 per cent of their de-
posits. while those in smaller places
need keep only Is per cent--and 8 per
cent of the Is may be on deposit IN
other cities. tf I'd,
A country banker therefore does not
have to wait until somebody brings in
81 900 and deposits it before he can
loan a business man that amount Of
money. If he thinks 1t is a good loan
all he has to do is to see that his
reserve warrants MIN in selling that
much credit In other words. ne must
have SEQ against 1t in cash in his own
vaults and $50 on deposit In reserve
banks. Then he may give the business
man securing the loan credit for
81 900, and the business man Is per-
mitted to check against this line of
credit. The banker knows that the
greater part of 1t will be used merely
in the transfer of credit from one ac-
count to another, and very little cash
will be withdrawn from the vaults.
The banker knows that the business
man will make deposits of his rev.
enues as they 'crue, thus accumulat-
ing a credit to extinguish his DEBT
when It shall become due.
At certain seasons the stock of credit
that bank has to sell runs low. The
new currency bill was designed to
meet these seasons with line of cred
it that automatically expands and con-
tracts to meet the needs of the situa-
ton. 1t is expected that the new law
will keep the country's stock Of credit
in such shape that it will avoid the
annual depletions that are a result Of
crop movements and such Hke-things
that require greater volumes of credit
than are available throughout the year.
A part of the machinery of the new
currency law is the regional reserve
bank-a creature solely of that law.