Evening star., 1932-02-12
GLASS BILL GIVEN
COMMITTEES 0. K.
Sponsor to Call Up Measure
for Senate Action Some
Time During Day.
CONTINUED From First Page.)

wise obtain to avert failure. The two
provisions relating to unusual redis-
count operations are so carefully safe
guarded as to make it improbable that
there can be any unwholesome imitation
Of the currency unless we may assume
that the Federal Reserve banks, with
the approval of the Federal Reserve
Board, will be unWise and improvident
enough so as to administer the law AZ
to bring about dangerous expansion.
1T should be very definitely UNDER
stood, as it is very explicitly agreed on
all hands. that the introduction Of this
the So-called Glass bill now before
the Senate Banking and Currency
Committee for consideration. On the
contrary, this measure is now in process
of being carefully perfected and soon
will be ready for consideration by the
full Banking and Currency Committee
of the Senate"
Await Further Reduction.
A possible result Of President Hoo
ver's anti-hoarding campaign was seen
in the latest figures on money in circu-
lation given out by the Reserve Board.
They showed this amount, still more
than a billion greater than it was
year ago without legitimate business
reason for such an increase, was re-
duced during the past week by s5000,-
900 Officials, however, were waiting to
see whether the reduction would con-
tinue before hailing it as return TO
normal handling of money.
The Glass measure, identical with the
House bill, follows in full text:
BE it enacted, etc, that the Federal
Reserve act, as amended, Is further
amended by inserting between section
10 and II thereof, new section read
ing as follows:
Section 10(a. Upon receiving the
consent Of not less than six members OF
the Federal Reserve Board, any Fed
eral Reserve Bank may make advances,
i'll such amount as the Board of Direc-
tors of such Federal Reserve bank may
to groups of five or more
owned and controlled
member banks within its district upon
their time or demand promisSory notes.
the liability Of the individual banks in
each group to be limited to such pro-
portion of the total amount advanced
to such group as the deposit liability OF
the respective banks bears to the ag-
gregate deposits liability of all banks in
such group, but such advances may be
made TO lesser number Of such men,
Der banks if the aggregate amount OF
their deposits liability constitutes at
least 10 per centum of the entire de-
poSit liability of the member banks
within each district
Distribution Of Proceeds.
Such banks shall be authorized to
distribute the proceeds OF such loans to
such of their number and in such
before so doing they shall request such
recipient banks to deposit with a suit
able, trustee representing the entire
group, their individual notes, made in
favor of the group, protected by such
collateral security as may be agreed
upon.
ANY Federal Reserve bank making
such advance shall charge lnteTe-,
thereon at a rate not less than l per
centum above its discount rate in eject
at the time of making such aoT2Hce.
No such note upon which advance are
made by a Federal Reserve bank under
this section shall be eligible unde: Sc
ton 16 of this act as collateral SccGTl-y
for Federal Reserve notes.
mo obligations of any foreign gov
ernment, individual, partnership, eS.o-
ciation or corporation organized under
the laws thereof shall be eligible as
collateral security for advances under
this section.
National banking associations are
authorized and empowered to indorse
or guarantee notes OF other member
banks evidencing advances made pur-
suant to the provisions of this section.
Section 9 The Federal Reserve act,
as amended. is further amended by
adding, Immediately after such new
section l0(a), an additional new section
reading as follows:
Section lO(b). In exceptional and
exigent circumstances and when any
member bank has no further eligible
and acceptable assets available TO en-
able it to obtain adequate credit accom-
modations through rediscounting at the
Feaeral Reserve bank or any other
method provided by this act other than
provided by section l0(a), any Federal
Reserve bank, subject to each case 70
affirmative action by not less than six
members of the Federal Reserve Board
holding Office at the time, may make
advances to such member bank on itS
time or demand promiSsory notes Sc
cured to the satisfaction of such Federal
Reserve banks; provided, that,
Rates Of Interest.
"1 Each such note shall bear in
terest at a rate not less than l per
centum per annum higher than the
highest discount rate in effect at such
Federal Reserve bank on the date of
such note; (2) the Federal Reserve
Board may, by regulation, limit and
define the classes of assets which may
be accepted as security for advances
made under authority of this section
and 90 no note accepted for any such
advance shall be eligible as collteral
security for Federal Reserve notes.
No obligation Of any foreign govern
ment, individual. partnership, aSsocia-
tion or corporation organized under
the laws thereof shall be eligible as COL
lateral security for advances under this
section.
Section g. The second paragraph OF
section l6 of the Federal Reserve act
| as amended, is amended to read as fol-
lows:
ANY Federal Reserve bank may make
| application to the local Federal Reserve
| agent for such amount of the Fedora
! Reserve notes herein before provided fol
| as it may require. Such application
shall be accompanied with a tender Il
| the local Federal Reserve agent of col.
| lateral in amount equal to the sum OF
| the Federal Reserve notes thus applied
| for and issued pursuant to such appli.
! cation.
Collateral Security.
"The collateral security thus offered
shall be notes. drafts, bills of exchange
| or acceptances acquired under the pro-
visions of section 13 of this act or bills
of exchange Endorsed by member banl
of any Federal Reserve district ano
purchased under the provisions of sale
section IA or gold or gold certificates
provided however, that at any tim,