New-York tribune., 1906-12-20
VIEW MONEY LAW LIKELY
PROSPECTS IN SENATE.
Objection There to Credit Currency
-Nr. ElkinS's Bill ApprOued.
Irrom The Tribune Bureau

-rosbington Dec 19.-Prospects for financial
,..,slstion TO prevent money stringency are re-
-.,5ed by the Senate leaders as considerably
-,gbter than they were a short time ago. Be
ses the House bill, which is a modification of
,hs credit currency plan OF the Bankers As
.,cistion, and Senator Depew's measure per-
,ri,ting the deposit OF customs receipts in those
-s.ional banks which are government deposi-
.,-,ss. Senator Elkins introduced in the Senate
,o-day bill which is similar TO but somewhat
more radical than the Depew measure
II the House passes the measure reported by
,s committee il is probable that it will be so
modified in the Senate to eliminate the credit
currency feature. and will be amended by the
addition Of the more desirable features of the
Ekins measure
Senator Elkins's bill so amends the existing
law (Revised Statutes. Sec 5,I53) as TO strike
from it that language which excludes the
moneys received from customs duties from the
funds which may be placed IN national banks
which have been made government repositories.
PROVISION LIKELY TO PASS.
It's believed there will be no objection TO this
provision. and that Congress will, by some
method. enact it into law at this session. The
Ekins bill also provides. however, that all
moneys Of ths government beyond a safe work.
ain the gold reserve shall be deposited in the
national repositories. and that the banks shall
nay such interest on government deposits as the
secretary Of the Treasury may require
II is doubtful whether either Of these pro-
visions viii command the approval OF the SEN
sic Committee on Finance. and it is almost Ger
tain that they Will not do so without material
riedifcation As the bill is drawn, the only dis
Tetion il leaves TO the Secretary of the Treas
IVY is as 10 the amount TO be retained for
working balance and the amount estimated 10
te necessary TO maintain the gold redemption
,uHd. All the rest of the moneys of the govern
ment must be kept in the banks. Senators who
are familiar with this subject and who regard
financial legislation as absolutely necessary OBJ
jsct 10 this provision the ground that il would
probably SO stimulate speculation as to precipi-
tate soon money stringency which the Secre-
tsry OF the Treasury would be powerless TO re-
leye. the governments resources under the
operation Of the bill having been entirely ex-
bausted and that there would. therefore be wide
spread financial disaster.
OBJECTION TO INTEREST CLAUSE.
The other phase of the Elkins bin which is
certain 10 meet with objection is the provision
thar the banks shall pay interest on the gov
eminent deposits. 1t is feared that this may he
held 10 change the legal relation of the govern
ment 10 its money. To-day. money placed in
he national repositories is deemed by the Su-
preme Court 10 be in the Federal Treasury. It
IS q hailn'eHt. not 2 loan. and its deposit does
hot create the relation of debtor and creditor
But il is feared that under the interest provision
n the Fkns hill such relation would be
tsbished and that government deposits would
become. in essence, call loans. The Senate Fin
ance Committee viii consider this question care
fully before taking any risk Of diminishing the
security Of government deposits in national
hanks. There Is a general objection TO Ioaning
The peoples money at a small rate Of interest.
10 be loaned out 70 the people AT a high rate of
Interest and If il is decided that the interest
provision would change the relationship between
The government and its funds that section Of
The hin VIII receive short shrift.
There Is no indication that the Senate Com
mittee Finance will deviate from the cOnVic-
u0n il has always held that credit currency is
10 he avoided. Under the House bill any bank
meeting with certain requirements could issue
credit currency amounting TO 1880 for each
NklssN Of its capital. The tax provided for
such currency is regarded by the Senate experts
as entirely insufficient to insure the prompt re-
urement n the emergency currency when the
emergency had passed.
II is declared however. that whatever other
steps may be necessary. every one familiar with
me financial requirements of the country Will
recognize IN the chief provision OF the Elkins
measure step in the right direction and one
which should be adopted