Evening star., 1932-02-12
GLASS BILL GIVEN
QUICK APPROVAL BY
BANK COMMITTEE
Sponsor to Call Up Measure
in Senate Some Time
During Today.
HOUSE CONSIDERATION
is PROMISED EARLY
Senator Renews Assurances That
Proposal Will Not Be Used
to Initiate Currency.
BY the Associated Press.

BY the Associated Press.
The Senate Banking Committee
quickly gave its approval today to the
emergency measure opening the Federal
Reserve system for cashing of new
paper held by the Nations banking in
stitutions.
Senator Glass. Democrat, Virginia
was authorized to take his bill imme-
diately before the Senate and he an
nounced that would be done during
the day.
The committee acted after a one
hour session, during which additional
safeguards to protect the Federal Re-
serve from a loose infiationary process
were put into the bill.
The legislation faces prompt enact
ment in the Senate, but likely will not
be taken up until Monday. Speaker
Garner promised quick House conSidera-
ton.
Last for One Year.
1t is expected by the administration
to relieve the national credit strain and
take billions of now ineligible paper
from the banks-principally the smaller
inStitutionS-and convert 1t into nego-
table paper.
The Federal Reserve is placed in COM
plete command of the new paper to be
negotiable in its system-a vote OF six
of the eight members Of the board being
necessary on all propositions
Provisions of the legislation allow only
for one year Of life.
In providing for permanent revision
of the reserve laws to allow for rediS-
counting of now ineligible paper in
cases OF emergency upon application OF
a group of five banks. the Banking
Committee today stipulated that the
! banks must first exhaust all of their
eligible paper before making applica-
ton for the additional help.
Senator Glass today informed the
committee member banks of the Fed
eral Reserve system now hold So, $780,
100000 Of usable assets which they
have not rediscounted. However. he
srnilingly said he would go through
with the program agreed upon at a
conference between President Hoover
and congressional leaders.
Meyer Asks Early Action.
Gov. Eugene Meyer of the Federal
Reserve Board said the bill would re-
lease about S750000, 900 Of gold.
Meyer appeared before the House
Banking Committee this afternoon and
| urged it to act expeditiously on the
measure. Earlier Charles G. Dawes,
president of the Reconstruction Finance
Corporation. had appeared and outlined
his views in executive session.
Glass today gave renewed assurances
| that the bill would not be used to in
fate the currency. His statement fol-
lows:
The newspapers, through no fault of
| their own, but based upon a hastily
prepared and somewhat confusing
statement, have given an erroneous in
| depreciation to the bank measure today
| introduced by me in the Senate and
| by Representative Steagall in the
House. When the hastily prepared
statement was given out there was not
any agreement upon the several provi-
sions of the proposed bill; but all OF
the provisions were still subject to such
alterations of their phraseology as
those having charge of the measure
might determine.
| The BILL as perfected and intro
| duced, is not intended nor will it be
used for excessive imitation of the cur
rency. The temporary provision. COW
ering period of IL months, merely
authorizes for that time the Federal
| Reserve Board, should it deem such
action to be in the public interest, to
use the direct obligations of the United
| States as a basis for currency issues.
| against which there must be gold
reserve of 40 per cent. This will en-
able the Federal Reserve banks to
maintain a desirable volume of what
is known as free gold, which means
gold in excess of the 40 per cent statu-
tory requirement and not including
| 'earmarked' gold. This simply fortif1es
the gold status of the Federal Reserve
banks in this period of extraordinary
disturbance. 1t is altogether probable
that the Federal Reserve banks may
not find it necessary to make use OF
this authorization.
Provision on Interest Rate.
Another provision of the bill that
was introduced is lifted textually from
what is known as the Glass BILL now
in process of consideration by the Sen
| ate Banking and Currency Committee,
with slight modification of the specific
| rate of interest which may be charged
| to organized groups of banks desiring
rediscount facilities on other than ELI
gible paper and securities. The dis
| count rate Is lett TO the determination
of the Federal Reserve Board; but in
no event shall it be less than per cent
higher than the prevailing rate of dis
count at the Federal Reserve Bank OF
| any district using this facility. There
must be joint action by not less than
five banks in any one group and the
great probability is that there will be q
| great many more should circumstances
ever require the use of this facility.
The third provision of the bill au-
| thorizes any single member bank. in
| exigent circumstances, to get accommo-
dation at a Federal Reserve bank or
satisfactory security not now permitted
by existing law; but it may do this only
after it has used all of its available
eligible commercial assets and United
States securities and is in immediate
need of help to which it may not other
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