The Bridgeport evening farmer., 1916-11-02

vented a panic. To the credit of the
Democratic party, the law was iber-
allied by the Federal Reserve Act
and made into a practical measure
of service.
Under the original law bank is
suing currency in accordance with its
provisions was charged 5 per cent.
per annum for the first month, per
cent. for the second month, per
cent. for the third month, the tax
Increasing at the rate of 1 per cent.
per month until the sixth month,
when 10 per cent. per annum was
exacted. The Federal Reserve law,
however, amended these rates so that
bank could be accommodated with
emergency currency at the rate of
per cent. per annum for the first
three months, the tax increasing at
the rate of one-half of 1 per cent.
per month until a maximum of
per cent. per annum was reached.
And in order to meet the situation
created by the European war effec-
lively at the earliest possible moment,
Secretary McAdoo asked Congress to
further liberalize the provisions Of the
Northumberland Act, and the Demo-
cratic party rushed through Congress
on the 4th Of August, 1914, only a
few days after the outbreak of hos
.tilities, amendments authorizing the
Secretary of the Treasury to waive
the requirement that a bank must
have an outstanding circulation Sc
cured by deposits of United States
bonds equal to at last 40 per cent
of its capital before it could receive
any emergency currency; authorizing
the Secretary also to suspend the pro-
vision of the act which limited the
actual amount of the currency which
could be Issued under it to $500,0O0,-
900, and authorizing him to issue to
any national bank circulation notes
equal to 125 per cent. of it's unim-
paired capital and surplus. This ac-
ton freed the law Of all impediments
In the first week of August, 1914,
500, 068,350 Of emergency currency
was issued under the Aldrich-Vree-
land act as amended and made work.
able by the Democratic administra-
ton, and altogether $386,444,215 Of
such currency was Issued to all sec
lions of the country needing it. All
of this emergency issue has since
been retired
On the morning of the August, 8,
1914, the Sub-Treasury in New York
city was in position to issue, and did
issue, millions of dollars of emer-
gency currency to the banks of New
York. The Sub-Treasury was able to
do this because a Democratic admin
istration had the foresight and intel
icrnV 70 oh frnr t,N ,if 80
ington, by express, on the Saturday
preceding August 3, 1914, or the day
like $40.000,000 Of emergency cur
rency to meet the very crisis the
bankers described, and this currency
was issued to the New York banks
upon the condition that they would
pay the currency over their counters
upon demand, not only Of their de-
positors, but of their correspondents
throughout the country, so that a.
currency panic similar to that which
befell the country in 1907 through
Republican stupidity and hesitation
would not occur again.
The administration having bridged
over the critical period, the Federal
Reserve System went into operation
on November 16, 1914, and has prov
ed itself to be in actual practice and
as a result of the test of experience
the greatest piece of constructive
legislation enacted by any political
party in the United States since 1860.
at least. If it had not been for the
Federal Reserve Act and for the ef-
fective work of the administration at
Washington, the great business pros
perity which the country is now en-
joying, would not have been realized.