Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-24
TIL. CURRENCY BILL
Senator AIdrich Called Up His
Measure.
Mr.. NELSON'S AMENDMENT
Its Nature and Intended Operation
Explained.
THE DEBATE WHICH FOLLOWED
No Action Taken, but Bill Will Be
Called Up Early This
Week.
Mr.. NELSON'S AMENDMENT
THE DEBATE WHICH FOLLOWED

Senator Aldrich, who has for some days
been endeavoring to get final action on his
currency BILL called the measure up in the
Senate shortly before o'clock yesterday.
Discussion progressed until 3 o'clock, when
| the special order for eulogies interior ed
J and the measure went over until this week.
| Mr.. Aldrich stating he should call it up at
| the earliest opportunity after tomorrow.
| Senator Nelson explained the nature and
| intended operation of his amendment to the
| bill. The amendment permits the Secretary
| of the Treasury to receive as security for
the deposit of government funds in national
banks government bonds, and, 'in his dis
cretion,' state or municipal bonds, also
| such bonds as the law permits the banks of
| Massachusetts and New York to accept
1t further provides that the banks shall pay
| the government at lesat per cent interest
| per annum on the daily balances on govern
| ment deposits. Mr.. Nelson said it had
| been contended that such a requirement
| would change the character of the govern
| ment deposits. He combated this idea,
i saying that if it was held that banks re-
| ceiving such reposits were fiscal agents"
| of the government, the money they thus re-
! ceived on deposit should be kept intact by
! them and not loaned out on interest. He
| said the better class of banks did not OBJ
| ject to paying interest on government de-
posts. .
Railroad Bonds as Security.
AS to the first proposition, Mr.. Nelson re
/ peated what he had said several days ago
| that the Secretary was now receiving rail-
| road bonds security. Senator Aldrich
| had questioned this at the time. and Sena-
| tor Nelson produced today letter from a
| banker of st. Paul which stated that the
| Secretary had received from him as secur-
ity for government deposits $1bo,OO0 CT
| Northern Pacific per cent bonds and
| $4,000 of Union Pacific per cent bonds.
Senator Aldrich admitted that he had
| been incorrect in denying the statement.
| Senator Nelson said he did not know by
| what authority the Secretary received such
securities unless it should be the words and
otherwise, in the law, laying government
States bonds and otherwise"
| Later when Senator Al6rich was discuss
ing the bill the same point was reached
| and Senator Nelson asked: by what
thority has the Secretary of the Treasury
| received other than government bonds?"
Il must confess that l do not know"
answered Mr.. Aldrich. Il do know that he
| has been receiving a miscellaneous char
| acter of securities but so far as l know he
has never reported to Congress the class
of securities he has been receiving" Still
| further in the debate Senator Tillman
| raised the same question and asked Senator
| Aldrich for further light. 1t Mr.. Till
| mans idea that by little stretching of
/
| wise the Secretary might be held to have
| the authority to accept other securities.
| He wanted to know what was Mr.. Aldrich's
| Interpretation.
Controversy for Many Years.
| 'This has been subject of great contro-.
| versy for many years in and out of Con-
| grecs Mr.. Aldrich answered. THE language
| was first used in 1864 The Secretary of the
| Treasury, acting the advice of the At
| torney General, construed that language to
| authorize him to accept, in addition to gov
eminent bonds, other securities of certain
classes. he making the designation himself
| and fixing the class of bonds which shall
| be received. The finance committee, know
ing that this was and always had been
controversy, thought it better to leave the
| language as it was rather than try to fix
l upon the classes of security which rl.ht
be received
The effect of the Nelson amendment as
| explained by Mr.. Aldrich would be to re-
| quire 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 as investments, would
be the ones which would receive the de-
| posits.
| Mr.. Aldrich said the finance committee
| had realized in dealing with the questions
| presenting themselves that there were
| many and difficult ones to be solved but
| that if an attempt made to solve them
| at the present short session failure in all
respects would result. Therefore," he con-
| tinued, 1.-The committee reported bill with
| the simple provisions permitting the Sec
rotary of the Treasury to deposit customs
| receipts in national banks in the same man.
ner as he deposits internal revenue receipts.
Secretary Doing This Now.
| GAS matter of fact, the Secretary of the
| Treasury is doing this now by depositing
| in banks all Of the internal revenue re-
| ceipts. and using the customs receipts to
| pay current expenses. But this operation Is
not direct. The money which is paid In
| customs receipts in New York is locked up
in the subtreasury in New York, and the
| fact that an equal or greater amount Is
| paid out in the same day in San Francisco,
| Louisville or Boston as disbursements OH
government expenses does not have the
| same effect as If the money paid for GUS
toms receipts in New York could be kept
| in the direct channels of trade by being
| deposited in the banks there"
Explaining the provision in the bill which
| increases from $3,0O0,C00 to 5000 600 the
| amount of national bank circulation which
| may be retired In any one month, Mr.. AL
| drich said the present limit was fixed in
| 1882, when there was tendency on the
part of national banks to retire their cir
| culation based on government bonds as Sc
| curity because of a suggestion by the Sec
| rotary of the Treasury that bonds of a
lower rate of interest would be available
| for such security. This condition made it
| desirable to place limit. on the retire
ment of national bank circulation, and the
| So, 600 coo limit was then fixed.
| The present universal demand for more
| elastic currency, he said, would be met to
| a very slight degree by raising this limit.
| Banks which now refused to increase their
circulation to meet currency demands, be-
| cause they could not retire this circulation
| quickly when the demand ceased. he said.
| would be encouraged to issue this circula-
| ton. This provision he regarded as "only
| drop in the bucket" in relieving the de-
| mand for elastic currency.
! The Shamrock Banquet.
| The Shamrock Club has engaged the
| Regent Hotel for it's banquet March Is. 4