New-York tribune., 1903-05-07
AN ELASTIC CURRENCY.
PROBLEM FOR SENATOR'S.
Plans of the Aldricb Subcommittee
Outlined.

oULEJUCU.
Washington, May (SpeciaD.--An outline Of
the plans of Senator Aldrich and his colaborers.
forming the subcommittee of the Senate
Finance Committee in session at Hot
Springs. Va, has been given to The Tribune cor
respondent by the most trustworthy authority
on matters OF national finance in Washington.
Senator AIdrich and the Republican members
of the Finance Committee of the Senate have
come to full recognition of the absolute neces-
sity for a revision of the financial system of the
United States" declared The Tribunes in
formant. This necessity IS made more and
more apparent each successive financial crisis
is brought about by legitimate but increased
demand for money to transact the business of
the country at certain periods of the year The
demand for an elastic currency has become i'm
perative.
THE committee will take up the financial sub
ject from this point of view and spend ample
time in deberation and will consider every pos
slble financial expedient that presents any prac-
ticable or feasible legislative remedy. The end
sought will be a currency that will be suscep-
tible of expansion to meet the demands of any
emergency, and that may be contracted
the passing of the increased demand as not to
leave the country with a surplus of idle money
TO encourage speculation and wildcat enter
prises."
HAS Senator Aldrich been converted to the
House plan for asset currency" asked.
NOT AN ASSET CURRENCY MEASURE.
''No, he has not. While 1t is of course, impos-
sible TO predict the result of the conference of
the four Senator's it is safe 10 say that the
come will not be an asset currency measure II
is more likely that the Aldrich bill, which very
nearly became law last winter, although ad-
mitted by its author the time to be only an
expedent, will be the basis of the measure which
will be agreed upon.
off h h cad
rency. to be accomplished by making State,
county and municipal bonds available for de-
posit in the United States Treasury as security
for the deposit Of government funds IN national
bank repositories. This would OF course. have
released government bonds now used as such
security and made them available as security
for additional national bank circulation il
would also have tended to decrease the premium
on these government bonds. thus making them
less valuable as investments and more easily
obtainable by the banks AS national bank
circulation is based entirely on the public debt
or, in other words on United States bOnds-any
move which tends TO make an increased amount
Of these bonds available for national bank
circulation tends to relieve the financial situa-
ton to just that extent.
This was the expansion feature of the Aldrich
bill and there is no denying the fact that IL
met with substantial Endorsement on both SIDES
Of the Senate Chamber, and also had many
friends in the House What may be con-
sfdered the serious defect in this measure how
ever. is the lack of any provision for contract
ing the currency after 1t has been expanded 10
how this contraction feature is to be added 10
the measure is Of the knotty problems with
which the four Senators VIII nave 10 M[esrie- oni
The only way known TO contract the CIT
Culatng medium is by taxation This was the
method proposed In the Fowler asset currenc!
measure But in that instance II ts doupt1u! II
the plan would have worked on account OF the
small tax provided. To devise tax provision
that will work automatically to contract the
CURRENCY in times of plenty. feature OF the
Aldrich bill would be to solve the hard question
OF the present moment, and make that measure
probably the most logical step that coulo o7
taken in the present necessity
GRAVITY OF THE PROBLEM
"A glance at the rapidity with which the na-
tional debt will vanish within the next twenty
or twenty-five years. and to appreciate tha'
with the vanishing of this debt the security for
national bank circulation is also vanishing is 10
realize the gravity OF the problem which coI-
fronts the four experienced Senators VINO al
now working at Hot Springs II tne relutIull6 tiln
offar az the Secretary Of the Treasury is taken
advantage of to the full limit Of SlOtOoooo.
there will still be S230 100000 OF ana 80 Pc
cent bonds which will mature in I9o' "a no t9,o To-,
Next YEAR the loan of 1894 and 1s95 will mature
decreasing the bonds OF the go0erdnniheHiI, ddn en-, b
S133s50Jo In 1872 oyer nn SrH wbich prac-
ticaIIv eliminates the public debt-the sole naSls
for national bank circulation. -,,,+ y,
Great wsight will be given TO the result oI
4,a 5efita~o tfons NJ the four Senators, because
of their erninen. fitness for the task whlch tHe.
have undertaken Senator Aldr1ch rs a ia1 iadii a.
wide experience IN DuSu4CSS eA4i@
fairs Senator Allison has three times reluseJt st
the Treasury portfolio during his th!rty 60
a-,,;oa in tba Senate Senator Platt, or CuIi-
pecticut is lawyer OF exceptional abiiity, anu
his judgment has great weight shat IN Tue rtar of
senator Spooner is brilliant in deoate' e.,,,,
head and an unexcened authority on conss,,pb s,,p-
tional law It has been stated sihoe .h.. Senator
oy,,,i,taa has been called together tnal ,a Sel,e
~ =. L. orI1 one who is inclined 10 oeileNe
~ tba e[f7cacy of the asset currency aine
proposed by the House Conllll... H. ,bs Senator's
ao out oson 10 this plan is only recent II ma a.
however have bearing on sht ths reSu ef Which IS
fiot - Far19aTd TO with so much interest py
easing American hnancieTs some of Nv ~e esnit bv
Teauested that they be ADVISED u '
cable