The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-06-23
Cannon and Financial Legislation.

Cannon and Financial Legislation.
Congressman Cannon, who will preside
over the lower house Of the next congress,
is reported to have announced his pur-
pose of opposing any financial legislation
on the ground that it IS not needed. 1t is
surmised that Mr.. Cannon desires to head
off the Introduction in the house Of the
currency bill to be prepared by Senator
Aldrich and the republican members Of
the subcommittee Of the senate committee
on finance, as decided at Hot Springs, Va,
not dong ago. He is opposed to senatorial
dictation Of legislation to the house, but
1t Is we'll known that President Roosevelt
Is squarely in favor Of practical and eff
sective plan to modify and improve the
national banking system. The American
Bankers association has adopted resolu
tons expressing unqualified approval Of
tire enactment of a law imparting a
greater degree Of elasticity to our cur
rency system, in order to make it. respon-
sive to the demands Of the business inter-
ests Of the country, and committee was
appointed by the president of the associa-
ton to consider the entire subject Of pro-
posed changes in the currency system
The New York Chamber of Commerce has
also passed resolutions to the same effect
and, in the west, various plans looking to
currency reform have peen widely dis
cussed. =.
= The bill which Senator Aldrich intro
duced in the senate, at the close Of the
late session ~ cOn1ress was deficient in
a very important particular. 1t made
some provision for expansion Of the cur
rency on business demand, but 1t had no
provision for the contraction of the cur
rency, when not needed by business. It
provided that national banks could de-
post with the secretary of the treas
ury, in addition to government bonds, for
security for government deposits with
them, first-class state, municipal and rail-
way securities, and that the secretary of
the treasury could deposit with the ma
tionals customs receipts as well as in
ternal revenue receipts. The bill to be
prepared by Mr.. Aldrich's subcommittee
is intended to remedy the defect m this
measure.
OF course, If currency reform is brought
up in congress, as it probably will be, il
the president recommends such action, the
financial question is likely to enter as a
factor Of discussion In the campaign
There are widely differing views on The
subject, but there Is no doubt that there
is a growing conviction that, fundamen-
tally, the need Is for system which would
permit the national banks to take GU,
emergency circulation, with provision FOL
dts retirement when the necessity is past
This is accomplished by the Reichsbank
or imperial bank of Germany, which is al
lowed to issue notes above its apportion
ment, which must either be secured by
specie, treasury notes or the notes O
other banks, or be taxed per cent, which
tnsures their withdrawal when the neces
sity passes away. Thus, In time of sewers
monetary stringency or a panic. tn,
needed expansion Is easily accomplished
and when normal conditions are restored
to the money market the extra issues con
tract. In Germany when the demand TO-
money raises discount rates high enough
the money is forthcoming, responsive t,
the willingness to pay the higher discoun
rates. Under this system the expande,
currency cannot stay expanded beyond tn
time 1t Is needed. It possesses the quail
ity Of elasticity Of which we hear so much
and which in our system does not exist
Whenever the New York clearing hous
Issues it's certificates. we'll secured, t
help out the money market, the tax Of
per cent upon such issues effects thei
speedy redemption when no longer needed
The same effective process can be mos
advantageously bdopted under nationa
law. AS a matter Of fact this process !
largely admitted to be the present, urgen
and conspicuous need Of the business 9
this country. It is likely to receive larg
attention in future discussions OF the sub
ject