TO PREVENT MONEY PANICS.

Press, Volume L, Issue 14903, 17 February 1914, Page 10

TO PREVENT MONEY PANICS.

AMERICA'S REVOLUTIONARY

PROPOSALS

(raoM OCR owx correspondent.) SAN FRANCISCO, January 18

The new banking and currency system, introducing revolutionary innovations with tho object of preventing money panics, is engaging much of the time of President Wilson and his Cabinet. The success or otherwise of the system depended to a large extent upon whether it would prove acceptable to the banking interests. If tho banks with national charters refused to take stock in the Kegional reserve banks, which are to be established in twelve cities to hold re_e_ves, tho plan would break down. During the passage of tho measure through Congress there was considerable opposition to it on the part of powerful banking houses. It now appears, though; that the !.an'-.s an; accepting the plan, and arc agreeable to -üb-jcribe for stock in the reserve banks. One week after the measure became law the Government announced that 757 banks, scattered ovter 45 Stages, and , having an aggregate capital c_<iusive of ' surplus of approximately L"GO.C\*_,OOU, had informed the Federal authorities of their intention to enter the new currency system. This so*.-* at rest ah doubts as to tho practical workability , of the far-reaching reform. The bringing into existence of twelve banks, situated in selected geographical centres, with powers and functions not hitherto contemplated in the currency of the country, of course, involves an immense am6unt of organisation work. Thc Secretary of the Treasury, Mr McAdoo, and the other members of the committee upon which devolves this task, have practically been living in trains"since the first of the month, and will do so for several weeks more, visiting different cities where it has been suggested regional reserve banks should be set up. A special steel car has been set apart for them. Public hearings are to bo held —in some cases have been held—in fourteen large cities. The cit- , ies which are almost certain to have I reserve banks are New York, Boston, i Philadelphia. Atlanta, Chicago, bt. I.ouis, San Francisco, Kansas' City, and ■ New Orleans. It is within the power !of the committee to keep ibis number of such banks down to eight, but twelve is the greatest number that may be established. New York, in vitew of its financial pre-eminence, is seeking the establishment of a reserve bank in that '• ; ty of such a size that it would over--"""auowall the others. Secretary McAdoo does not favour this.