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LEGISLATION SINCE WARSMJXPERTS: Striking Features of New Currency Law About to Become Operative _ NOVEL IDEA IS ITS ENTIRE ELASTICITY Question of What Was to he Done Writh Government Bonds Seems to Have Been Satisfac torily Solved nj HOLLAND Nmv York. Vugust 10.—(Special.)—With tho organization of the federal reserve hoard, too long deferred, the defects which were in the old national bank law will ■ for the most part remedied. Yet the old law has served, on the whole, adequately to aid in the development of American resources and in the growth of the United States. In many respects, the old national Tank law was marve lously successful In its operations. The defects that were in it, or some of them, were emphasized immediately after the chaotic condition occasioned by the out break of the war in Europe, and had the rew national bank law been in opera tion the highly artificial and yet on the whole successful method adopted by bankers in co-operation with the govern ment for the protection of American in terests would not have been necessary. American bankers place great confidence in the ability of the federal reserve board* it is a diversified ability in the s» nse that some of the members are very highly qualified bankers, whereas others possess expert knowledge of American Industrial, financial and agricultural con ditions. One of the members at least combines both of these qualifications—Air. Harding of Birmingham. Ala. Various attempts have been made to set forth clearly and briefly, so that the aver age business man can understand, the new features of American banking. The general principles which are embodied in the new federal reserve acts are fairly well understood by the public, for it was in response to public demand that this legislation was enacted. Channing Rudd of Baltimore, widely known In this city and to expert authori ties throughout the country as the or ganizer of the ‘ finance forum,” lias re cc ntly very clearly and yet briefly made exposition to the Alaryland Bankers’ as sociation of the meaning and presumable operation of the federal reserve law. He called attention of the Maryland bankers to the fact that there are four especially desirable features in the new law which were not to be found in the old one. One is a centralized control, another is mo bilized reserves; still another is redis count facilities, and a fourth important feature is one which provides permanent elasticity. Three of these features are to be com prehended only by practical bankers or students of banking, for they involve for the most pai t purely technical bank ing matters. But in a currency, and especially an elastic currency, every one, even the hublest wage earner, is interested be cause it is mainly by means of currency of its representative that men are able to make exchanges of what they have for what they desire and which other per sons car sell them. A Safe and Elastic Currency Everyone knows that the first national banking law was passed really as an emergency measure. The Secretary of the Treasury, Salmon P. (’base, and those with whom he. was in council in Congress, wanted to create a market for United States bonds and also to put out e currency which would be acceptable at its face anywhere in the United States and would have behind it the quality and absolute safety. To secure the quality of safety, the currency was based upon United States bonds. That was a quality acquired at the expense of elasticity and it was a lack of this quality which In part explains scvi-ral of the panics, notably that of 1907. which have occurred. Many persons have asked many times what will become of the United States bonds after the new banking law goes into effect. A little over 5700,OoO,000 of national bank rates are still outstanding and these are based upon government bonds. This is a prob lem which puzzles the members of the national monetary commission and also greatly perplexed the members of Con gress who drafted the present national banking law. The new law does not solve the problem, but it finds the way for get ting around the difficulty temporarily. For Instance, under the new law national banks are not required to retire their bonded circulation, Unit ninny Increase or dc« reasn their circulation ns they did under the old law. But by a most ingenious ami not wholly Satisfactory measure there are to be ab sorbed every year a certain amount of retired circulation which will permit the bonds upon which this circulation stood to be released, and yet by a somewhat complicated process. . A year and five months from this time and thereafter for 20 years any national bank will bo able to retire either the whole or- any part of its circulating notes If it apply to the treasurer of the United States to sell fit not less than par and accrued interest the bonds upon which , the circulation is based. In order to make a market for these bonds, If necessary, the federal reserve board may compel the federal reserve banks to buy them, although the aggregate sale in any one year Is not to exceed $25,000,000. This is a slow-going method, but it was the only one practicable so long ns government bonds were outstanding and are used for the basis of cirulation. This arrange ment docs not solve an important prob lem so far as the bonds of the govern ment which bear 2 per cent interest are concerned. It may be that it will be found that there are three possible markets hereafter for the United States bonds. One. that ordered by the reserve bank which may buy as many as $25,000,000 a year from banks which surrender circula tion. Then again, national banks may get these bonds for the purpose of In creasing their circulation. There may be a market for the general public, but that would be a purely investing martcet. The committees of the two houses of Con gress which drafted and perfected the prerent law appear to have been per suaded that the chances are remote that government bonds bearing 2 per cent in terest will hereafter command more than par. So that It #nay be that If banks buy In the open market they will be able to get the bonds below par excepting those which the federal reserve board compels them to buy. It Is a fact of which the public has lit tle or no knowledge that between 80 and 90 per cent of the entire bonded debt of the United Statep Is held by national banks. The best opinion seems to be that many millions of the 2 per cent oonds would be sold by national banks in case they are able to obtain a price of par or. a fraction less. Banks will be glad to MU their bonds at par, but rather than / 1 |^ Blue Ribbon I HI The Beer of Quality Eis better because of its Age, Strength and jim, 9 Purity. The soft smoothness of Blue Ribbon is agree- fiffr 9 able to everybody. It has the full flavor of fully I li'lfl'lH 9 matured malt, so plainly noticeable, and a zestful snap I ij 9 which is extremely enjoyable. 9 < Beneath its rich, creamy foam you will find a mellow, I delicious beverage that not only satisfies as a drink but waste 20 years before finding them all i absorbed they probably will be willing to sell them .slightly below par. It Is an interesting fact that, with a sin gle exception, the bonds of the United State commend the smallest Interest of those of any nation, while they sell at a higher price. That is a fact which Il lustrates the general confidence in the United States held by the people in all parts of the world. Many bankers con sider that the best feature of the new law, a feature which Is original and therefore new, is the one which prtvldes sue of federal reserve notes, provision is to bs found iha . A . • .-•* quality which will'enable our currency to expand when there is need of expansion when that is advisable, or, In other word*, to become elastic. Presumably this will, in the course of time, completely replace currency based on bonds. Instead of bonds the new law provides for adequate gold reserves. These notes are to ibe secured by crude commercial paper which repre sents value or by indorsement by a din counting bank which, In addition to its other liabilities, carried a reserve of 4»J per cent In gold, and then behind all this is the direct responsibility of the l/BiteO States government. In tfmj we shall learn 1 whether the new federal reserve notes ar ■ ■ II— PI1 ' as perfectly conditioned as they should be, for there are many bankers who object to the government guarantee ot them and others who fear that they may lead to In tis lion cf the currency—that Is to eay, con traction cai.not he secured as rapidly aa expansion. But, on the whole, the view of bankers and of the government at Washington, as well as of the members of the federal reserve board who begin at once their labors of organisation^ so that the measure la the finest piece of con structive legislation since the civil war, and lhat It will provide, posalbly by some future amendment, a banking and our i rei.cy system second to none in the world, e ■ / ■ \'£ . ** . <. \ This is the system which is to be organ ized speedily and which is to be In full opt ration before the end of the year. Pulfed Com; Fined S40 Anniston, August 10.—(Special.)—Getting hungry while walking'along the roadside, George Battey and Will Evans pulled some corn frbm a field near the plant of the American net and twine mill. They were arrested after cooking the corn In', a pot an# when urralgned in polloe eotnt hfre Saturday the «d to m New Sidewalks Being Laid in Fort Payne Fort Payne, August 10.—(Special.)—Work has been begun and laying the new side walks in Fort Payne on the west side ol Gault avsnuo from the Ralpey hotel to the pontoftice building on tlje south and fom along the north side of Ford street extending from Forest avenue to Gnalt bounty jail at this place tonight for air tempted murder on his sweetheart. t Open Air Servicer ° Greenville , August Sunday evenings the :he Baptist, Methodist and Preshvterli?,v churches hold open air union services on :he corner of Cedar end Pine .streets. benches and a pulpit have been hull* md the meeting* are largely attended, rhe pastors of the different churches lave charge of the meetings. The open ilr services will continue tnroughout tMk summer and early fall.