The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-03-05
THURSDAY, MARCH S, 1903.
A POST MoRTEM.


says that aside from all questions as to
the merits Of the measure, the Demo-
@scrats presented the strongest argument;
If that the advocates could not overcome
q the objections Of the feature Of the bill
(which allowed the loaning Of government
funds to banks ut one and one-half per
Z cent. while banks could loan the money
a at six per cent.
3f If the advocates Of the Aldrich Dill
we're not able to meet this objection they
must have been Ignorant, indeed. Sew
# ernl days ago we printed communica-
a&tion from a well known banker in Rich
s1nond. in which he. raised l4le objection
53that the bill would make 1T Improbable
for banks to use government deposits
unless there should be some concession
in tho rate of interest to be charged,
Nor in the class Of securities to be held as
collateral. Our correspondent raised the
X following objections to the bill:
$s In the first place. he recommends i'm
posing not less than ono and one-hnlf
per cent tax 81 on government deposits
Fin national banks, while tho government
bonds held as security for deposits pay
H3the banks less than one and three
Yfourths per cent: per annum; and as the
reserve banks have to keep from fifteen
per cent. to twenty-five per cent. re-
serve against these deposits, they would,
s@under the passage of this measure, find
government deposits a loss to them
~ selves. tl
4 Again, railroad bonds which could be
taken as security would not pay moro
than three and one-half per cent. per
Eannun, and the presumption is that
ha
IT near the price at which they should be
$s taken and the amounts of same deposits
would have to be SO large that 1t woulc
leave no profit to the banks even at that
@s His bill provides that outside of gov
@ eminent bonds, no bonds shall be taken
III other than those OF railroads that have
paid dividends of as much as four per
# cent per annum for period Of ten con-
"a secutive years past
This would exclude all the southern
trunk lines. such as the Atlantic Coast
Line, Louisville and Nashville and the
81 Southern Railway. (Which are as good
f6 as the northern roads,, as none Of these
roads has paid dividends Of four per
r cent. per annum for ten consecutive
years past; and although the Richmond
and Petersburg Railroad the Petersburg
+ Railroad. and the Wilmington and Well
d don Railroad which are now constituent
N parts OF the Atlantic Coast Line system,
have paid regularly o.vidends Of at least
-four per cent per annum for about
twenty years past they would be barred
because they are no longer individual
roads.
In fact. there would be great many
y roads In the North which would also be
excluded under this bill, such as
1.-THE Baltimore and Ohio. Northern Pa
cific, Union Pacific and the Central Pa
ciGc. and mary roads whose stocks are
& selling above par
Etail the amount of bonds to be taken by
1.-THE Secretary of the Treasury as security
against deposits The amount would
X necessarily be very small.
As stated in qthe FIRST part of my letter.
this requirement would cut down the
4 bonds to those Of the Pennsylvania Rail
road. the Illinois Central and the New
4 York Central which sell on a basis OF
y les than three and one half per cent.
X So deducting net loss of one-half per
Il cent, interest on deposits. and consider
Ing that the banks have to keep from
fifteen per cent, to twenty-five per cent
reserve out of the said government de.
posts. the profit left to the banks would
E be Very small; and under the clrcum-
a stances / do not think they would be
Is willing to run the risk OF buying the
q bonds and taking the deposits for sc
q small n profit, and believe many OF
them would give up their deposits, which
would lessen. Instead of increase thu
IL medium of exchange.
NJ 1t must be remembered that these gov
ernment deposits are Subject t,
check" yet under this bill they wcr
Ft TO be protected by gilt-edged sccuritie
tie deposited with the government as col
= lateral, and they were to pay an nteres
+ OF not less than one and onc-half pc
cent Is there business man in Rich
Inond who would not jump at u propos
5l ton OF this sort from local bank?
Is not the custom of Richmond banks t
pay any interest whatever on deposit
'subtect TO check" A few of the bank
there pay small interest on dali
balances but they do not secure de
posts By putting UP bonds MS colatera
Again. Democratic Senators shout
have known that except In times {
scarce money the big banks OF the cour
try lend at a much smaller rate OF inter
est than six per cent. Call loans
New York In times OF easy money brin
from one and one half to three pc
cent, and there is much complaint no,
because in the present stress FIVE pc
cent. Is demanded on time loans, r,
suppose the banks would make goo
profit on government deposits under tn
Aldrich plan. would 1t not be better fo
the government TO get one and one-ha
per cent interest on It's surplus than I
keep the money in the treasury vaul
q and get no interest whatever?
si For our part. we have seen absoutel
no argument against the Aldrlch bill
IT seemed to US to be wise and niece
gary provision to meet an emerging
and 1t was a great mistake to defe'
St, Since last Friday the sub-treasul
hns drawn from the banks nearly A,oN
0oo. thus sim further depicting the 81
NJ .i,lu .rasar,xcs q nj a1iiuchtng the hnnl