Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-20
THE ALDR|CH BILL
Not Likely That It Will Pass
Congress,
OR ANY LIKE MEASURE
DEMOCRATS WILL OPPOSE AND
REPUBLICANS NOT UNITED.
Secretary Shaw Confronted With Prob
lem Of What to Do With His
Large Cash Balance.

Prominent republican and democratic
| senators and representatives and well-'n-
formed students of financial subjects agree
| that the prospects of important and be!ie-
| fetal financial legislation at the next ses-
| sion of Congress- viewed from the present
! outlook. is extremely doubtful 1t Is FIRE e!y
| predicted that the republican senators can
| not be made as unanimous for the Aldrich
bill again as they were at the close of the
last session of Congress. when the bill was
| defeated merely because there was not suffi-
cient time to allow a few of the opposition
| senators to give their views. Not only Is
| there less unanimity of republican senti-
| ment for what are known as the Aldrich
| ideas, but the democrats, under conserva-
| tive and wise leadership. promise to oppose
| these ideas, although declaring that they
| will welcome financial legislation that will
| be of real benefit to the country. Becalse
of the approach of the presidential election
the democrats will not it is declared, Dp-
| pose any legislation of financial nature
| for which there is united demand of the
| business or banking interests OF the coun-
| try, but they realize, 1t is said, that there
| is wide difference of opinion as to the
| Aldrich bill. and consequently they do not
! fear to attack that measure or its pr:n
ciples embodied in any other measure.
| Aldrich Bills Main Feature.
| principal feature of the Aldrich bill
| was the provision that state, municipal
| and railroad bonds of approved classes
| might he accepted by the Secretary of the
| Treasury as security for the deposit or
public moneys. The democrats are attack
ing this feature on several grounds Their
| first objection to it IS that 1t encourages
| the continuation of surplus in the Treas
| ury Department when the tariff laws ought
| to be amended so to prevent such sur
| plus: second. that If the people were re-
lieved of tariff burdens to the extent of
| $40 O0,OO or $40,OOO,0o3 a year that amount
would not have to be placed In the hands
| Of national banks for their benefit; third.
| that in ma king such deposits the banks are
| being allowed the use of government money
| without interest.
| The leading feature Of the democratic po-
sition, however, is that the government is
| every day accommodating money that 1t can
| not use. and that to prevent financial
/ crash by reason of the accumulation of this
| sum outside of trade channels the Treasury
| Department is compelled to do, something
| with it; that one of it's ways of putting the
I money back into circulation is to deposit it
| in national banks. Another contention is
| that the placing of this money in the banks
| encourages overspeculation and the put
| ting out of endless stocks of all kinds 1t is
| claimed that If the banks are not burdened
/ Win money tney Will NOT INdke lOdIS Oh
| anything except legitimate business, but
| that If they have a plethora of funds, in
| Guiding those of the government. they will
| lend On stocks that are not gilt-edged and
| thereby encourage transportation and
dangers that might menace the business of
the country. To sum 1t up briefly, the
democrats say that to get rid of this state
| of affairs instead Of providing for easier
methods of putting out government money,
! the reformation of the tariff and the re-
duction of the government income would
| be the best and safest plan; the position be-
| ing that there Is plenty of money in the
country.
Security of Government Bonds.
Owing to the comparative. scarcity of
government bonds, which are the basis of
security for both circulation and deposits.
national banks, even when opportunity Is
afforded them to secure deposits Of govern
ment money, find that it costs something
to get bonds to put up as security. Should
other than government bonds be accepted
as security for deposits of public money
the national banks would be on what many
would call Easy street, in their ability
to furnish security that would not come as
high government bonds at the present
prices. The total amount Of United States
bonds now outstanding is $914, ,541, 400, and
of this amount the national banks of the
country own or control between $3.50, O80, 600
and 5000 O0O, 900. The banks at present have
deposited with the treasurer of the United
States in trust for both public money and
circulation the immense total of $533, OFT 500
of government securities besides whatever
"free" bonds they may hold. Every time
the Secretary Of the Treasury increases
public deposits, and more bonds are re-
quired. the bond market takes an upward
flight without further waiting. Consequent
ly the banks although receiving the bene-
fits of government money placed with them,
must pay high prices for bonds to be used
as security. The Aldrich bill, democrats
point out, would make it comparatively
easy to obtain security for deposits of pub
lie money If various classes of bonds could
be used.
Bonds Held in Trust
August Is the treasurer held in trust for
national banks security for public de-
posits $152. 500, $50 showing that there is
that amount of money belonging to the
United States in possession of the banks
To secure circulation the treasurer held
$3.50 ATT $50. Secretary Shaw has been TAX
ing steps for some time looking to fur
ther deposits of money with national banks
in view of the prospect. until a few days
ago. that he would be compelled to pay to
Colombia and the Panama Canal Company
$J0,O00, 600 for the canal property and other
rights. Now that the canal treaty has ap-
parently been killed the Secretary will be
confronted during the tight money season
this fall and winter with the problem of
what to do with the large cash balance he
has in the treasury vaultS-money that it
will be contended by the business interests
of the country ought to be in circulation in
stead of locked in the treasury. Will more
money be placed with national banks when
they already have more than $150OO0,OO9 of
Uncle Sans cash in their possession, or
will other means be resorted to that the
money may be put out? viii government
bonds be purchased for the sinking fund?
Or will there be further refunding, which,
If 1t does not cut down the amount of gov
ernment bonds outstanding, will reduce the
interest debt of the government?
These and many other ideas must present
themselves to the Secretary of the Treas
ury. 1t is in the solving of the question
that the democrats are right now interest
that they can at this time make capital Of
the big sums of government money outside