The commoner. (Lincoln, Neb.) 1901-1923, December 01, 1913, Page 14, Image 14
S?W3 t .. The Commoner 14 VOL.. 13, NO. 32 Vi!ntrn, ) m i; TW W1W tfHVP i. h tr ft i v Currency Bill Reaches the Senate After nearly three months of pre liminary work, the committee on banl'dng and curroncy submitted throe currency bills to the somite on November 22. Tho original Glass Owen bill went to tho calendar on Chairman Owen's request, but with out recommendation. Tho debate on the curroncy ques tion was opened in a speech delivered by Senator Owen, November 24, on bohalf of the administration forces, and on Tuesday, November 25, Sen ator Hitchcock spoke against the ad ministration bill in a speech setting forth tho position of tho republican members of tho banking and cur roncy committee. COMPARISON 01? THE BILLS Following is a comparison- of tho administration house bill, tho ad ministration senate bill and tho Hitchcock-republican bill, as pub lished in tho Philadelphia Public Lodger: ADMINISTRATION HOUSE BILL Creates 12 regional banks, -capitalized at $100,000,000. Stock, which is to bo subscribed by individual banks, represents 20 per cent of their combined capital; national banks are compelled to join, but state banks and trust companies may join. Tho federal reserve banks shall bo banks of issue and rediscount and shall be the fiscal agents of the United States government. Stock shall be subscribed by the national banks. One-fourth shall be paid for in cash, one-fourth in 60 days and the remaining-one-half sub joct to call. Division of Earnings Stock to pay 5 per cent, Addi tional earnings to be divided as fol lows: ( One-half to create a sinking fund of 20 per cent. Above that net earnings shall be distributed 60 per cent to the government and 40 per ,cent to member banks in the ratio of their average balances with the reserve bank. " Regional Bank Officers Nine directors shall conduct each regional bank, six to be chosen by the banks and three by the federal resoVve board. One-half of those . named by the banks shall represent the financial and commercial inter ests of the district. Federal Reserve Board Shall consist of seven members, in cluding the secretary of the treasury, secretary of agriculture and con troller of tho currency. Four shall be named by the president with due regard to tho geographical divisions of the country. Salaries $10,000 and term of office eight years. Rediscounts i Rediscount privilege shall bo ro- ptricted to member banks and limited to commercial paper maturing with in three months. Four months paper may be redlscounted, however, when reserve. bank has one-third cash re eorvo. Reserve banks shall receive de- Dosits of money, checks and drafts for collection and bills of exchange. They shall also receive all govern ment ' funds above the necessary working balance in the treasury. Foreign Branches Any national bank with $1,000,000 capital may establish, a branch abroad. , Savings Department National banks may segregate 20 er cent of their capital stock and . operate a savings bank department. i 'Reserves Against-Deposits ;- Country banks shall maintain a 12 '.. iev'cont reserve, of which 5 per cent ! shall bo in their own vaults in law ful money. For 14 months 3 per cent and thereafter 5 per cent of its reserves shall be maintained with the reserve bank. Tho romainder may bo left on deposit with reserve city banks. Noto Issues Thp federal reserve notes are to be issued at the discretion of tho fed eral reserve board. They shall be redeemable in gold or lawful money. Notes shall be issued on collateral security of equal amount. They shall bo secured by a reserve of 38 1-3 per cent in gold or lawful money. Redemption Fund A 5 per cent redemrtion fund in gold shall bo maintained at the treas ury. Collections Rosorve banks thall receive at par checks and drafts upon any of its de positors, making no charge for col lection. Bond Redemption Any national bank may apply to the secretary of the treasury in any one year for the refund of 5 per cent of its 2 per cent bonds bearing the circulation privilege and shall re ceive 3 per cent 20-year bonds with out their circulation privilege. At the end of 20 years all twos shall be refunded and the outstand ing circulation canceled. ADMINISTRATION SENATE BILL Creates eight regional reserve banks, to bo capitalized at $106,000, 000, equal to 6 per cent of tho com bined capital and surplus of member banks. Membership of national banks is made compulsory and of state banks permissive. If the stock is not subscribed by tho banks it shall bo offered to the public, and that not absorbed shall be taken by the government. No person or corporation except a member bank shall securo more, than $10,000 of stock. Division of Earnings Stock shall pay 6 per cent divi dend. Tho surplus earnings shall first go to create a 20 per cent sur plus fund and after that to the United States as a franchise tax. The government's earnings shall be ap plied to reducing its bonded indebt edness. Regional Bank Officers The affairs of bank shall be board of nine classes: Class chosen by the each federal reserve administered by a directors of three A Three members banks. Class B Three members chosen by the banks' representatives from the agricultural, industrial and commercial world. Class C Three members selected by the federal reserve board. Federal Reserve Board Supervision of the whole system is lodged in a federal reserve board of seven members, including the secre tary of the treasury and six members named by the president. The directors shall be chosen with due rejard to a fair representation of the "financial, commercial and geographical divisions of the coun try." They shall serve for six years and receive $10,000 per annum. Rediscounts Reserve banks may rediscount the direct obligations of member banks, secured by "satisfactory securities." Tho amount loaned shall not exceed three-fourths the value of these securities. Discount of bills receivable or foreign bills and acceptances shall be subject to regulations imposed by tho federal, reserve board. Foreign Branches Any member bank with $1,000,000 capital and surplus may establish a foreign branch. Savings Department Stricken out of the bill. Reserve Against Deposits Federal reserve banks shall main tain a 35 per cent reserve in gold or lawful money against its deposits and note issues in circulation. Its gold reserve in its own vaults and with the treasury for redemption shall be 33 1-3 per cent of notes outstanding. County banks shall maintain a 12 per cent reserve against their de mand liabilities and 5 per cent of their time deposits. The disposition of these reserves varies after 14 months, and again after 36 months. Collections A federal reserve bank shall col lect checks and drafts for its mem ber banks or other reserve banks, but a reasonable charge may be made by the member bank making the. col lection, subject to the approval of the federal reserve board. Bond Redemption Any member bank may surrender its 2 per cent bonds to the secretary of the treasury, who shall assume re sponsibility for the outstanding Vank note issues thus secured. At the option of the federa.1 re serve board these bonds may be con verted into 3 per cent bonds, or as one year treasury notes renewable for 20 years and bearing 3 per cent interest. The limit of redemption shall be $36,000,000 annually. The circulat ing notes thus retired shall be re deemed out of funds furnished the secretary of the treasury by the fed eral reserve bank making the applica tion. The federal reserve board shall, in turn, deliver to the regional reserve bank an equal amount of federal reserve notes. The treasury shall hold tho bonds as security for such notes. HITCHCOCK REPUBLICAN SENATE BILL Creates four regional reserve banks, capitalized at $106,000,000, representing 6 per cent of the com bined capital and surplus of the banks. Four additional reserve Tianks may be created by federal . reserve board after two years. Stock shall be subscribed by tho public, but underwritten by tho banks, payment to bo made in gold or gold certificates, one-third in cash, one-third within thirty days and one third within sixty days. Division of Earnings Stock to, pay 5 per cent. Addi tional earnings shall bo divided as follows: .One-fourth to creato a sur plus fund o,f 20 per cent, then 37 1-2 per. cent to create a depositors' in surance fund. All above that goes to the govornment. Regional Bank Officers Nine directors shall operate the regional reserve bank. Five shall bo chosen by the federal reserve board and four by tho member banks. Federal Reservo Board Shall consist of nino members, in cluding the secretary of tho treasury. The president shall name eight mem bers for eight-year terms. They shall receivo $12,000 annually. Rediscounts Paper for rediscounts shall bo ac cepted from member banks at three fourths of its faco value. Each member bank, "as a matter of right," may discount up to an amount equal to us capital stock. On per cent moro rediscounts it shall pay an additional tax of X per cent and on an additional 50 per cent 2 per cent additional. Tho limit is made twico the bank's capital stock. Foreign Branches Any member bank with $5,000,000 capital may establish a foreign branch. Savings Department Stricken out of tho bill. Reserves Against Deposits Country banks shall maintain a 12 per cent reserve against deposits 1 per cent in its own vaults, 1 per cent to bo deposited each six months in a reserve bank until 4 per cent is so deposited, and 4 per cent either in its own vaults or with tho reservo bank. Noto Issues Federal reserve notes shall be issues under authority of the federal reserve board. They shall be redeem able in gold alone. Reserves Notes shall be issued to reserve banks in amount equal to the secur ity deposited and secured by reserves of 45 per cent of gold or gold cer tificates. Reduction in the. gold reserve be low 45 per cent is permitted down to 30 per cent on penalty of a 1 per cent tax for each 2 1-2 per cent de crease. Redemption Fund A gold redemption fund of 5 per cent shall be maintained at the treas ury, to be increase.d to 10 per cent at the discretion of the secretary of tho treasury. Collections Reserve banks, shall receive checks and drafts for collection, but mem ber banks may mako a reasonable charge for collecting and remitting funds subject to the approval of the reservo board. BOOKS RECEIVED ou Causes and Cures of Crime. By Thomas Speed Mosby, member of the American bar. C. V. Mosby company, St. Louis, Mo. Price $2.00. The Future of the Working Class. Economic facts for employers and wage earners. By Roger W. Bal on, president of the Babson statistical organization, Wellesley Hills station, Boston, Mass. Based on certain lec tures delivered by the author at Lon don and Paris in March and April, 1913. Babson's Statistical Organiza tion, Wellesley Hills Station, Boston, Mass. Price 50 cents. Markets for the People. The con sumer's part. By J. W. Sullivan. The Macmillan company, New York. Price $1.25. The Mountains- About Williams town. By George Lansing Raymond, L. H. D. With an introduction by Marion Mills Miller, litt. D.. G. V. Putnam's Sons, New York and Lon don. Price $2.00, net. Jim's Western Gems. By J. J Somers. Prices (postpaid), paper cover, $1.00; embossed ripple flnisn. $1.50. Address orders for this book to J. J. Somers, 417 Fifth Ave., &. Minneapolis, Minn. Care of The Iron Trail Co. Old Fogy. His musical opinions and grotesques. With an introduc tion and edited by James Huneite. Theodore Pressor Co, 1712 Chcstnat St., Philadelphia, Pa. Labor and Administration. By John Tt. Commons, professor of pon . -cal economy, University of Wiscon sin, formerly director of the .u. waukee bureau of economy and e i , ciency and member of the dustiml commission of Wisconsin. The Mac millan company, New York. Pi ice $1.60. . aAtW, -. L' . J. h .?' & - ita 'i.m,. fs, 'fMtit&XmUi ffiJ.