New-York tribune., 1907-02-24
FINANCIAL BILL UP.
DISCUSSED IN SENATE.
Mr. -4Idrich to Press for pOte
EarIy Neat Week.

~
Washington. Feb. Ex-senator AIdrich who
has for some days been endeavorins to get final
action on his Currency bill. called the measure
up in the Senate shortly before o'clock to-day.
Discussion proceeded until 3 o'clock. when the
special order for euloges interfered and the bill
went until next week. Mr.. Aldrich eX-
pressing his purpose to call it up at the earliest
opportunity after Monday
Senator Nelson explained the nature and in
tended operation of his amendment To the bill.
The amendment permits the Secretary of the
Treasury to receive security for the deposit of
government funds in national banks government
bonds and, lin his discretion. state mu-
ncipal bonds; also such bonds the law per-
mits the banks of Massachusetts and New York
to accept. II further provides that the banks
shall pay the government at least per cent in
terest on the daily balances Of government de-
posits Mr.. Nelson said it had been cOntended
that such a requirement would change the char
acter of the government deposits He combated
this idea. saying that II it were held that banks
receiving such deposits were fiscal agents OF
the government the money they thus received
on deposit should be kept intact by them and
not loaned out on interest. He said the better
class of banks did not object to paying interest
on government deposits. As to the first propo-
siton, Mr. Nelson repeated what he had said
several days ago, that the Secretary was not re-
ceiving railroad bonds security. Senator
Aldrich had questioned this at the time and
Senator Nelson produced to-day letter from q
banker of ST. Paul which said that the Secre-
tary had received from him security for gov
ernment deposits $l5OOOO of Northern Pacific
I per cent and $4,000 OF Union Pacific per
cent bonds
Senator Aldrich admitted that he had been in
correct in denying the statement. Senator Nell
said ne did not know by what authority the
Secretary received such securities. unless it
should be the words "and otherwise" In the law,
saying government deposits should be secured
by United states bonds and otherwise"
Later, when Senator AIdrich was discussing
the biz, the same point was reached and Senator
Nelson asked, BY what authority has the Sec
reCtory OF the Treasury received other than gov
e-nment bonds?"
4 must confess that do not know" answered
Mr. Aldr!ch. Il do know that he has been re-
ceivins q miscellaneous character Of securities
but so far I know he has never reported to
Congress the class Of securities he has been re-
ceiviug."
SuIl further IN the deba,e Senator TiIlman
raised the same question and asked Senator
Aldrich for further light. 1t was Mr.. TiIlman's
idea that by little stretching Of the inter
probation of the wording and otherwise" the
secretary might be held to have the authority
10 accept other securities. He wanted 10 know
what was Mr.. Aldrch's Interpretation.
This has been a subject OF great controversy
for many years IN and out of Congress- NIr.
AIdrich answered. The language was first used
IN 1861. Tho Secretary of the Treasury. acting
on the advice Of the Attorney General, has con-
strued tha: language to authorize him % accept
In addition - government bonds other securities
Of certain c.asses. he making the designation
nlHse!t ana iNlns the c'ass or bonds which
shall be received. The Finance Committee
knowing tha; this was ana always had been
controversy. thought II better 10 leave the Ian
guaga II "a ther than try fix upon the
classes of securities which might be received"
The effect OF the Nelson amendment. as ex-
planned by Mr. AIdrich would be to REQUIRE all
government funds TO be kept in national banks
and the operation Of It's provisions would be that
the large banks of the country, which habitually
carry United States bonds investments. VouiQ
be the ones which would receive the deposits
Mr.. AIdrich said the Finance Committee had
realized IN dealing with The questions present
ms themselves that there We're many and ditti-
cult ones TO be solved bUt that II an attempt
was made 10 solve them at the present short
"ThogesOre.' ne continued The committee re-
ported n bill with the simple provisions per-
mittinG the Secretary OF the Treasury TO deposit
customs receipts in national banks In the same
manner as he deposits Internal revenue receipts.
As matter ot fact. the Secstary OF the
treasury is doing this now by depoSttiHg In
banks all OF the internal revenue receipts and
using the customs receipts 20 pay current eX-
peuses. But this operation is not direct. The
money which is paid ia customs receipts IN New
York is locked up In the SUb-Tredsury IN New
York. and ths fact that an equal or greater
Francisco. Louisville ur Boston Az disbursements
on government expenses does not have the same
effect as II the money paid for customs receipts
in New York could be kept In the direct cham
neis Of trade by being deposited In the banks
there"
Explaining tine provision Of the bill which In
creases from 100000 10 1000 600 the amount
OF national bank circulation which may he retired
in any one month Mr AIdrich said the present
limit fixed In 1882. when there was a tend
ency the part Of the national banks 10 retire
their circulation based on government bonds ds
security because OF n suggestion by the SeCre-
tary of tho Treasury that bonds of a lower rate
of interest would be available for such security.
This condition made II desirable 70 place limit
on the retirement Of national bank CirCula ZION,
and the $3OOOOOO limit then fixed.
The present universal demand for more elastic
currency, he said. would be met to very slight
degree by raising this limit. Banks which now
refused to increase their circulation meet
emergency demands because they could not re
tire this circulation quickly when the demand
ceased would be encouraged TO increase their cir
culaton. This provision he regarded as "only a
drop IN the bucket" I'm meeting tho demand FOR
elastic currency.