The State Journal (Mulhall, Okla.), Vol. 12, No. 5, Ed. 1 Friday, January 2, 1914 Page: 4 of 6
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MULHALL. OKLA., STA TE JOURNAL
■''i
•-vm; • ■:• '^^1^
Now Money Law Displaces 122-
Year-Old Code.
IS FAR-REACHING IN SCOPE
Most Important Law Relating to Fi-
nance Passed in Many Years Es-
sential Features of the Meas-
ure Explained In Nontech-
nical Language.
Washington, P«c. 23,-The new bil
affecting tho currency, bunking am
finances of the country Is one °'U®
most fur reaching measures relating o
finance that have been enacted In
many years.
The magnitude of the subject. the
diversity of Interests afTecteil and the
length of the debates In both branches
of congress has to follow the changes
mill grasp the essentials of this highly
technical measure In Its Important
bearings on money, finance, banking
and the entire range of ll«c l subjects,
liubllc and private, which It affects.
Summary of the Bill.
With a view, therefore, of present-
ing succinctly and In non technical
language an epitome of the salient fea-
tures of the measure as finally framed,
tho following summary Is given of the
bill as a whole and of its principal de-
tails:
Generally speaking, the first steps
to be taken to bring into operation the
nation's new financial system will be
through an organization committee
consisting of the secretary of the
treasury, secretary of agriculture and
controller of the currency.
HankH have 60 days within which to
file their applications for membership
In the new system, and 01 years
time la allowed before the government
will compel the dissolution of any na
tlonal bank that refuses to Join.
Will "Take Up the Slack."
The* new law will make little direct
change In tho operation of the prea-
ont i.atlonnl banks, except to allow
theifl lo loan a certain amount of their
[umlii upon farm mortgages.
Its chief purpose Is to add a new
piece of machinery to the banking
system that will "take up the slack"
during the changing business condi-
tions of each year; that will give the
banks a place to quickly convert their
assets Into cash In time of need, and
that will bring out new federal cur
rency when it Is needed, and retire It
when money becomes "cheap."
Hanks are now required to keep
certain percentage of their deposits as
"reserves," part In cash In their own
vaults and part of which may be re
deposited In the banks of New York
Chicago, St. Louis and other deslgnat
ed cities.
In times of sudden financial de
mands, when banks have loaned up to
the full limit of their resources, these
reserves furnish little relief, because
If they are paid out to meet demands
the banks are loft In a precarious con
dition.
Basic Principle of Law.
The basic principle of the new law
Is to get these reserve funds out Into
circulation when necessary without
lessening the safety of any batik, and
to provide a place to which local
banks may rush in a crisis and get
cash for the "prime commercial pa-
per" they hold in their vaults.
Tills is to be accomplished through
a chain of regional reserve banks, or
"reservoirs of reserves," In which all
banks shall deposit a stated part of
the money they are required to hold
os reserves.
Under tho new system, when a
financial flurry comes the banks can
take commercial paper, such as notes,
drafts and bills of exchange, to these
"reservoirs," and Becure the use of
their own reserves, or, if necessary,
even the reserve of other banks, by
depositing this security.
The new regional banks will re-
ceive about one-half of the bank re-
serves of the country, 'ihey in turn
will be permitted to loan back to the
banks all but 35 per cent, of these
reserves, so that In case of emergency
millions of cash can be brought out
Into circulation quickly.
The banks will have to pay for these
loans, however, as Individuals have to
pay for a loan from any local bank,
and this charge Is expected to prevent
the too free use of the reserves held
by the regional banks.
New Paper Currency.
A new form of paper currency Is
also provided tor, to come out In case
of emergency, and which is expected
to go back Into the hands of the gov-
ernment when times are normal.
These "treasury notes" will bo printed
by the government and issued through
each regional reserve bank, and will
bear the guarantee both of the re-
gional bank and of the government.
If the demand for currency In any
section of the country exceeds the
supply of circulating money a regional
bank can secure this new money
from the government and put It into
circulation; but a gold reserve of 40
per cent, and commercial paper equal
to the full value of the note must be
held as a reserve behind each note
Issued.
This provision Is expected to be the
Influence that will drive the new
money back into retirement when It
Is no longer needed.
Clearly Explained.
The following analysis presents the
details of the new law without ad
lierlng closely to the technical division
or language of the measure:
At the head of the system will Btand
a federal reserve board at Washing
ion, appointed by the president, d
to consist of the secretary of .af
treasury, the controller of the curr'.-
cy and five other members. Two of
these shall be expert bankers, but
none shall have banking affiliations or
own bank stock during their service.
This board will exercise general con-
trol over the entire system.
The temporary "organization com-
mittee." or the federal reserve board,
will select from eight to twelve cities
where regional reserve banks Bliall be
located and wjll divide the entire
country geographically with these
cities as the centers of districts. All
national banks in a district will be
required to subscribe for the stock of
the regional reserve bank In that dls
trlct and to keep a portion of their
reserves there.
Known as "Member Banks."
Local banks will be known as "mem-
ber banks" because they will own the
stock of the regional reserve bank
of their district. Each member bank
will be required to take capital stock
of the regional reserve banft, equal to
6 per cent, of the member bank's cap!
tal and surplus. The capital of the re-
gional hank will increase or decrease
so that it always represents 6 per
cent, of the combined capital and sur-
plus of all the banks of the district
that have Joined the system.
National banks are compelled to
Join and state banks are permitted to
if they bring their reserve require-
ments up to the standard set for na-
tional banks and submit to national
examinations.
Public Can Buy Stock.
Public ownership of the stock of the
regional reserve banks is permitted
ly In case enough banks do not join
n any district to provide a capital
stock of $4,000,000. In such event the
public may purchase the stick In
quantities limited to $25,000 for each
individual, but tho voting of this stock
will be placed In the hands of govern
ment representatives on the .board of
directors of the regional reserve bank.
The regional reserve banks may do
business only %ith their member
banks, not with the public, except that
certain "open market operations" such
as the purchase and sale of gold, gov-
ernment, or municipal bondB, and cer
tain forms of bills of exchange, are
permitted. These banks will make
their earnings from the loans made to
member banks, and from the purchase
and sale of bonds and foreign bills of
exchange.
Must Put Up Cash.
Member banks will be compelled to
put up In cash only one-half of their
subscription to the capital of the new
banka, the rest can be called for If
needed by the regional bank. Divi-
dends of 6 per cent, will be paid on
this stock to the member banks, and
the stock will be non-taxable.
After these dividends are paid one-
half of the surplus net earnings goes
to create a regional surplus fund, and
when this has reached 40 per cent, of
the regional bank's paid In capital
these earnings are to go Into the
United States treasury. The balances
of the net earnings are to be paid to
the United States as a franchise tax.
With the machinery thus created
for a new banking system that Is sup-
plementary to the commercial banks
of the country, the law provides for a
gradual transfer of part of the bank
reserveB to these new "reservoir"
banks.
In order not to disturb business con-
ditions, or to withdraw too suddenly
tho heavy deposits of country banks in
the large cities, the law provides that
three years may be consumed in shift-
ing these balances and that, if neces-
sary, part of the reserves transferred
The amount of reserve required
from every bank under the new law,
and the place where it must be kept,
are as follows:
Country banka—Total reserve requir-
ed. 12 per cent, of demand depositB
and 5 per cent, of time deposits. Five-
twelfths must be held In the bank's
own vaults for two years and four-
twelfthB after that. For the first year
two-twelfths must be kept in the re-
gional bank, increasing one-twelfth
each six months thereafter until It
reaches five-twelfths of the total re-
serve. For three years the unallotted
part of the reserve may be kept In
the banks of reserve cities. After
that .inie It must be kept either In
the country batiks and vaults or In the
regional reserve bank.
Reserve city banks—Total reserve
required. 15 per cent, of demand and
5 per cent, of time deposits. Six-fif-
teenths must be kept in the bank s
vaults for the first two years and five-
fifteentlis after that time. Three-fif-
teenths must be kept In the regional
reserve bank for the first year. In-
creasing one-fifteenth every six
months thereafter until It reaches six-
fifteenths. For three years the un-
allotted portion of the reserve may be
kept in other banks, in Its own
vaults, or in tho regional bank; after
that, time In one of the latter two
places.
Central reserve city banks (New
York, Chicago and St. Louis) Total
reserve required, 18 per cent, of de-
maud and 5 per cent, of time depos
its. Seven-eighteenths In the regional
reserve banks and the remaining five-
eighteenths in either place tho bank
may choose.
Regional Reserve Banks.
These Immense funds of reserves
from "member banks," together with
government moneys, will make up the
deposits of the regional reserve banks.
Each of these banks will be adminis-
tered by a board of nine directors, six
of whom will be elected by the banks,
and three appointed by the federal re-
serve board.
The regional reserve banks may re-
dlstrict—that Is, buy at a discount
from Its member banks—"prime com-
mercial paper" when the member
banks desire to convert these assets
Into money.
Character of Paper,
The exact terms of this important
provision as to the character of paper
upon which the regional reserve banks
may furnish caBh are as follows:
"Upon the Indorsement of any of Its
member banks, with a waiver of de-
mand notice and protest by such
banks, and federal (regional! reserve
bank may discount notes, drafts, and
bills of exchange arising out of act-
ual commercial transactions; that is,
notes, drafts, and bills of exchange Is-
sued or drawn for agricultural, indus-
trial or commercial purposes, or the
proceeds of which have been used, or
are to be used, for such purposes, the
federal reserve board to have the
right to determine or define the char-
acter of the paper thus eligible for
discount, within the meaning of this
act.
Eligible for Discount.
Nothing In this act contained shall
be construed to prohibit such notes,
drafts and bills of exchange, secured
by staple agricultural products, or oth-
er goods, wares, or merchandise, from
being eligible for such discount; but
such definition shall not include notes,
drafts, or bills covering merely invest-
ments or Issued or drawn for the
purpose of carrying or trading In
stocks, bonds or other investment se-
curities, except bonds and notes of the
government of the United States.
"Notes, drafts and bills admitted to
discount under the terms of the para-
FIVE FUNDAMENTALS
OF THE CURRENCY BILL
Issue of currency, guaranteed by
the government, based upon notes
and bills representing commercial
transactions and backed by a gold
reserve. The new currency Is ex-
pected to contract and expand to
meet the varied demands of trade.
Concentration of the bank
serves of the country in regional
institutions capitalized by the
banks of the country and con-
trolled by directors elected by the
banks.
Creation of a market for the ne-
gotiable commercial paper which
forms the bulk of the assets of the
banks, where, In time of stress,
those assets may be easily and
without loss transformed into cash.
Establishment of from eight to
twelve great regional banks
throughout the country, which will
issue currency, rediscount paper
and centralize and mobilize the re-
serves of the local banks.
Creation of a federal reserve
board of seven members appointed
by the president, with final powers
of control and supervision over the
entire system.
Dinner Gown in Brocade and Chiffon.
to the' regional banks may consist of I graph must have a maturity at the
commercial paper. I time of discount of not more than 90
HOW DISPUTED POINTS WERE ADJUSTED
The following changes affecting points at difference between the
senate and house were made In conference:
Comptroller of currency and secretary of agriculture retained as
members of organization committee.
Comptroller of currency made ex-offlclo member of federal reserve
board and total membership retained at seven and the term of office fixed
at ten years.
Alaska excluded from provisions of act.
After federal reserve districts are established, national banking asso-
ciations shall have 30 days in which to subscribe for capital stock of re-
serve banks.
Individuals may purchase up to $25,000 stock in federal reserve bank
Instead of $10,000, as provided In house bill.
Stock not held by member banks shall not be entitled to any voting
power whatever.
Number of regional reserve banks to be "not less than eight nor more
than twelve." as provided by the senate.
The minimum capital of regional reserve banks fixed at $4,000,000.
No senator or representative can be an officer of a federal reserve
bank. . „
No director of Class C directors of federal reserve board shall be an
officer, director, employe or stockholder of any bank.
Each member bank 1b permitted to nominate one candidate for Class
A and one for Class B directors
Subscription of member banks 6 per cent, of capital and surplus of
subscribing bank.
Senate provision for the guarantee of national bank deposits ellm-
I'Be of federal reserve notes as part of reserves of member banks
stricken out. ^ . . . ..
At least one-tlilrd of the reserves of the country banks must be held
In the vaults of local banks.
House provision for collections at par practically restored, banks to
be permitted to collect only actual expenses.
Retirement of 2 per cent, bonds aggregating $300,000,000 within 20
years provided for as against retirement of $125,000,000 In senate bill
Gold reserve behind the notes remains at 40 per cent., with a gradu-
ated tax agaliiBt any depletion.
Salary of members of the federal board Increased from $10,000 to
$12,000. . . . .
Members of reserve board shall serve two, four, six, eight ana ten
years instead of one to five years.
Reserve board can liquidate or reorganize reserve banks
Compensations for directors, officers and employes of federal reserve
banks shall be subject to the approval of the federal reserve board.
Recess appointments to reserve board shall expire 30 days alter the
following session of congress opens.
Net balance of amounts due to and from other banks shall be taken
as the basis for ascertaining tho deposits against which reserves shall '
determined.
days; provided, that notes, draftB and
bills drawn or issued for agricultural
purposes or based on live stock and
having a maturity not exceeding six
months may be discounted In
amount to be limited to a percentage
of the capital of the federal (regional)
reserve bank, to be ascertained and
fixed by the federal reserve board."
The "Elastic" Element.
The new treasury notes, which are
to furnish the "elastic" element in the
currency system, and to add to the
country's circulating money in time of
need, will come into use in the follow-
ing way:
The notes will be printed by the gov-
ernment, with a distinctive style for
each regional reserve bank. One of
the three directors named by the fed-
eral reserve board for each regional
bank will be known as the "federal re-
serve agent" for that bank, and a sup-
ply of the notes will bo placed in his
custody.
Should a regional bank desire to
pay out more money than Its cash re-
sources will permit, the law provides
that it may put some of Its rediscount-
ed commercial paper into the hands
of the "federal reserve agent," and re-
ceived in return the new treasury
notes.
For each note that it puts out into
circulation, the regional reserve bank
must set aside 111 gold 40 per cent, of
the value of the note as a guarantee
for its redemption. This gold, with
the commercial paper held by the
"federal reserve agent," is the pro-
tection behind the new money; but
these notes will also be guaranteed by
the government and may be redeem-
ed in gold In the United States trea
ury.
Reserve Required.
Each regional bank, under the act,
must keep a reserve of 35 per cent, of
the deposits it has received, besides
the 40 per cent, gold reserve behind
the treasury notes it issues. If the
gold reserve behind the notes falls be-
low 40 per cent, a heavy tax Is im-
posed on the bank, which In turn adds
the tax to the rate it charges member
banks for rediscounts. This was de-
signed to stop an over-expansion of
currency. In times of sudden stress
the federal reserve board can suspend
these reserve provisions, in order to
furnish quick relief to any commu-
nity.
One regional bank cannot again pay
out the notes of another, except under
a heavy tax. These notes are expect-
ed to return to the regional banks and
be withdrawn from circulation when
the need of their use passes.
Take Up Bonds.
None of the existing forms of cur-
rency except the national bank notes
will be disturbed by the new law. Tho
United States bonds, now used to se-
cure the issue of uational bank notes,
are to be taken up at the rate of $25,-
000,000 a year by the regional re-
serve banks and new treasury notes
or short term three per cent, bonds
will take their place. National bank
currency is expected gradually to re-
tire.
The federal reserve board will exer-
cise final control over the entire op-
ei atlon of the system. It; can compel
uie regional bank to loan to another
ia time of need; can suspend all re-
sections surrounding the reserves
w*lch regional banks must hold, and
caj remove directors of regional re-
se. ve banks whenever It Is believed
necessary.
Hanks In Control.
While the banks retain control of
th.< boards of the regional reserve
biciks, their connection with the fed-
eral reserve board is only through
au advisory council, made up of one
representative from each federal re-
sivve district. This council will meet
in Washington to confer with the fei
enil reserve board "on general busl-
nwds conditions" and to make rec n-
mendations and suggestions concern-
ing discount rates, note issues, and re-
stive conditions.
An Important change in national
bunking methods embraced In the new
law will permit all national banks ex-
eunt those In New York, Chicago and
S(. i/ouls to make direct loans on five
yuar farm mortgages up to 25 per cent,
of their capital and surplus, or up to
one-third of their time deposits.
Another provision 1'' the law
n,tts national banks having < uaP'tal
,V<_*1.000,000 or mure to open foreign
* v -«orlty Is glvfn
T5 <lfc ?CgloTnti re? 'h" Pur
pitse being to fac the develop-
ment of American traffle sbioad.
... x
THREE views of a handsome dinner
or reception gown are made pos-
sible by the clever triplicate minor ar-
rangement, In front of which It was
posed. The straight skirt, with a
demi-train, is made of crepe having
raised velvet roses and foliage scat-
tered over the surface. The roses are
very large and in a Blightly darker
shade than the crepe. *-
The chiffon overdress and bodice re-
peat the color In the crepe. The un-
der bodice Is of thin silk In a light
color. There Is a beaded girdle, nar-
row, and edged with the narrowest
overdress is drawn in at the bottom
with shirring thread. It slopes down
to a point at the middle of the back
and is finished with a narrow band ol
satin ribbon tied in a simple bow at
the front with ends finished with pen-
dents like thoB« on the bodice.
The undersleeve of the bodice is fin-
ished with a band of lace like that in
the neck, and it 1b put on without full-
ness. There Is a crushed turn-back
cuff above the band of lace, made of
the chiffon.
A novel feature In the bodice is the
introduction of a narrow casing In the
border of fur. This tiny edge of dark I maline ruff which holds a tiny support-
fur appears again on a small piece of
drapery made of the brocade, which is
poeed on the bodice, extending from
under the arms at the belt to the he-
ginning of the bust.
The neck of the bodice is slightly
pointed at the back, but is cut square
in front. It Is shirred over the founda-
tion and is very simple. The short, full
sleeves are set in and edged with a
narrow band of the brocade. A but-
terfly bow of ribbon Is posed at the
front finished with silk pendents.
There ie a frill of boxplalted maline
about the neck of the bodice which
does not extend across the front. Un-
ing wire. This iB for the purpose of
holding the ruff in an upstanding posi-
tion away from the neck.
There is nothing intricate or diffi-
cult in the shaping of this dinner
gown. The materials are not unusual,
and altogether It is one of the most
practical and graceful models which
Paris has furnished for the present
season. In spite of the curious and
sometimes freakish departures from
the conventional which one sees so
often pictured, It Is the practical
gowns of this character which have
pleased discriminating women of fash-
ion. There Is plenty of distinction In
der this is a lace edging which lies flat | the wonderful materials and In the
to the neck all round and is very at-
tractive and becoming.
Unlike many overdresses, which are
wired into the lampshade effect, thia
NEAT AND DURABLE
SERVING APRON IS
NOT HARD TO MAKE
A SERVING apron must be made to
stand weekly tubbing at least, and
substantia! materials are the only kind
worth making up. A good and not
very sheer India linen is used in the
apron which appears In the Illustra-
tion, and the lace is a strong cotton
weave with square mesh and figure.
The bib and apron are cut In one
piece, with the shoulder pieces cut
long enough to reach to the belt In the
back. The ties are long enough
make a bow with short ends.
After the apron has been cut out the
Insertion Is basted to the right side.
Then ths fabric underneath it Is split
and turned back. Over the edges
bias tape Is basted and > .:w.ciilne-
ThW < "v rn the raw
(T
stlt^a^down
• "^yes nn<" * <•
pfB
„ ihfoi
Fashion's Fickleness.
In the present day the o an i.
things needed to make the war I
complete, and as fashions In ;>
Items change with such rapidity
means there must be e constant
newal of \eils, collars and such
If the npp-«rance is to be kept
tlrely up to date.
There have been many noveltU
troduced this season, gone of
- .
V
use of color, not to mention tassels
and bead work, without resorting to
bizarre designs to get chic effects.
JULIA BOTTOMLEY.
lng which fasten It to place make an
additional ornamentation to the apron.
Hems at the bottom and at the ends
of the ties look best when sewed by
hand, but few people feel like giving
so much time (o a detail that is not
important. Careful, even machine
stitching Is decorative and quite good
enough.
A wide binding of the fabrlo Is
placed on the apron at each side and
starts at the rows of Insertion. The
ties, which are made separately, are
sewed to this binding. All these details
of construction are planned to add
strength to the apron, because its
freshness Is Its best feature and that
means soap and water and rubbing
and ironing many a time before the
apron begins to go to pieces.
There are quite a number of de-
signs for serving aprons. It is best to
select one and stick to it. The exam-
ple here Is large enough for any maid,
and Is as easy to launder as a hand-
kerchief. Four such aprons ought to
insure freshness in the maid's appear-
ance at all times.
For ladles who serve their guests,
smaller, more lacy and much more
elaborate aprons, rlbbon-trlmmed, In
fact much fussed up with bows and
furbelows, are made. Friends make
them for one another, and they are
dainty bits of finery. Such aprons are
usually made by hand. Cross barred
muslins and other sheer materials are
used for them, with val or cluny laces
In trimming. Little pockets are intro-
duced and many sprightly bows and
rosettes of gay ribbon. Pretty figured
voiles, white ground, covered with
scattered flowers, and figured lawns,
are fine for Buch aprons.
JULIA BOTTOMLEY.
Il
|
I
th ..jaterial, ai both practical and pretty, n ia,
o ws ot machine stitch- j af, in merely eccentric.
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Woosley, Tom B. The State Journal (Mulhall, Okla.), Vol. 12, No. 5, Ed. 1 Friday, January 2, 1914, newspaper, January 2, 1914; (https://gateway.okhistory.org/ark:/67531/metadc141274/m1/4/: accessed April 23, 2024), The Gateway to Oklahoma History, https://gateway.okhistory.org; crediting Oklahoma Historical Society.